Standen v Regina

THE COURT: By an indictment presented on 16 November 2010, the appellant, Mark William Standen (the appellant), was charged with the following offences:

After a lengthy trial before James J and a jury, the appellant was convicted on all counts. On Count 1, he was sentenced to 18 years imprisonment with a non-parole period of 12 years, commencing on 2 June 2008. On Count 2, he was sentenced to 22 years imprisonment with a non-parole period 16 years, commencing on 2 June 2008. On Count 3, he was sentenced to 3 years 6 months imprisonment, commencing on 2 June 2008.

The appellant has appealed against his conviction on all counts and has sought leave to appeal against his sentence on Count 2.

In its broadest outline, the Crown case can be summarised as follows. During the period covered by the indictment, the appellant was the Assistant Director, Investigations of the New South Wales Crime Commission (NSWCC). The only persons senior to him in the NSWCC were the Commissioner and the Director. He had a long history of working for law enforcement and investigative bodies, including the Australian Customs Service, the Australian Federal Police (AFP) and the Australian Crime Commission. He joined the NSWCC in 1996. For a number of years prior to his arrest, the appellant headed up one of two investigation teams at the NSWCC which investigated drug trafficking and money laundering.

The appellant’s alleged co-conspirator, Bakhos Jalalaty (Jalalaty), conducted an import/export food business. His wife (Ms Jalalaty) had worked with the appellant in the AFP and the appellant had met Jalalaty through her. The other named alleged co-conspirator, James Henry Kinch (Kinch), was a British citizen arrested in Australia in 2003 for drug trafficking and money laundering offences. After his arrest, Kinch commenced providing assistance to the NSWCC. The appellant and a NSW police officer, who was much junior to him, became the co-handlers of Kinch as an informer. The appellant introduced Kinch to Jalalaty. Kinch was not in Australia at any time during the period that the conspiracy was said to be on foot.

The Crown case concerned a conspiracy to import a large quantity of pseudoephedrine, in the order of 300 kgs, contained in shipments of rice, with the amount of money which could be derived from the importation at times referred to as $100,000 per kilogram. It should be noted that when the shipment of rice which was allegedly intended to contain the pseudoephedrine arrived in Australia, it did not contain any bags of pseudoephedrine.

Participants in the conspiracy were said to include the appellant, Jalalaty, Kinch and members of a criminal syndicate based in the Netherlands. It was alleged that Kinch had close connections with the syndicate, which was based around a Mr Ronald Haklander (Mr Haklander) (referred to as ‘Fat Ron’) (the Haklander syndicate). The syndicate had connections with persons in Pakistan who were believed to be able to secure large quantities of pseudoephedrine.

The Crown’s case was that the appellant formed a corrupt relationship with Kinch between the time of his arrest in 2003 and the commencement of the conspiracy. The admission of the evidence concerning this relationship is the subject of Ground 1 of the grounds of appeal. The Crown case was that during this time, the appellant commenced receiving corrupt payments from Kinch and the appellant regularly failed to report and document contact that he had with Kinch.

The Crown case was that the appellant was in a strained financial situation throughout the relevant period. He had incurred large credit card debts and had over-extended his finances by purchasing a property at Bateau Bay. The Crown case was that it could be inferred from this that he was expecting a financial windfall. This was allegedly consistent with communications between the appellant and Jalalaty about anticipated profits from the activities the subject of the charges.

The Crown case was that between 19 and 22 January 2006, Jalalaty met Kinch in Bangkok. Shortly thereafter, Jalalaty received approximately $1 million in cash from an associate of Kinch (referred to as the “Portuguese mate”), which was to be used to build-up Jalalaty’s business as a legitimate front for the illegal activities. The Crown case was that the appellant was aware of this payment. It was also the Crown case that the appellant was aware that before Kinch left Australia in 2004, he had access to over $1.5 million cash, the proceeds of drug dealing or related crime.

It was the Crown case that a substantial portion of these funds were invested by Jalalaty with a Mr Bruce Way (Mr Way), without the agreement of Kinch. The Crown case was that the appellant used his position and contacts to assist in attempting to recover that amount.

The Crown case was that the principal role played by Kinch in the conspiracy was to liaise with the Haklander syndicate. He was also to provide funding for the Australian limb of the operation. Jalalaty’s role was to deal directly with the syndicate members and their Pakistan associates in relation to the ordering and receiving of consignments shipped from overseas. He was also responsible for storing the pseudoephedrine contained in the shipment of rice. The Crown alleged that the pseudoephedrine was to be obtained from Jalalaty and then manufactured into a prohibited drug.

The Crown case was that the appellant had two major roles. The first was to use his law enforcement expertise and senior position to help his co-conspirators avoid detection. Second, on Jalalaty’s shortcomings becoming increasingly obvious, the appellant was instructed by Kinch to monitor Jalalaty and assist him in carrying out his role. At the request of Kinch, he also instructed Jalalaty on what to say to investigators in the event that he (Jalalaty) was questioned (the insurance policy).

The Crown placed considerable reliance on communications between the named alleged conspirators and others said to have been involved in the conspiracy. A large amount of lawfully intercepted material was tendered at the hearing. Although it is not necessary to record all of that material, to understand the case it is necessary to refer to some important aspects. This summary of the intercepted and surveillance material, as well as the summaries of the appellant’s and Jalalaty’s ERISPs, the documents obtained as a result of search warrants and the evidence of witnesses at trial, is largely drawn from the Part 1A Document provided by the Crown in the appeal. It was not contended by the appellant that the summary, at least to the extent that it is reproduced below, was incorrect.

The evidence relating to the intercepted material was led through Federal Agent Watt (Agent Watt). In his evidence, he explained the technique of covert email communications dominantly used by the conspirators. He explained that most of the email accounts held by the conspirators were not used to send emails. Rather, the login information for the accounts would be shared between the conspirators, who would then leave messages for each other in the form of saved draft emails. Draft emails would then typically be deleted or overwritten after being read. This enabled the conpirators to communicate without ever having to send emails or leave an email exchange. Agent Watt explained that while some of the conspirators’ emails were lawfully intercepted through telephone intercepts, others were intercepted by means of a device covertly installed on the appellant’s and Jalalaty’s computers, which took screenshots every ten seconds. The unsent draft email messages were captured in this way.

Agent Watt gave evidence that the AFP began investigating Jalalaty when he was sent a facsimile on 14 May 2007. The fax was from a fictitious company, MDL Food & Services India (MDL Food), which was understood to be a front for a Dutch drug syndicate already under joint investigation by Australian and Dutch authorities. It was sent from an internet café in Amsterdam which was used by the Haklander syndicate because it did not add a time or location stamp to outgoing faxes. The fax was purportly sent from Delhi India to introduce MDL Food as a “manufacturer and supplier of … food and beverages … all over India and Middle East”. It stated that MDL Food “would like to start business and co-operation with your company BJS Fine Foods in Australia”. The facsimile invited Jalalaty to visit MDL factories in Delhi and noted that MDL’s branch office was in the United Arab Emirates.

Kinch was known to the AFP by the time of the commencement of the investigation. On 24 May 2007, Dutch investigators photographed two known close associates of Kinch, Mr Haklander and a Mr Petrus Dekker (Mr Dekker), with Kinch in Amsterdam. On 29 June 2007, Kinch was also photographed with Mr Haklander, Mr Dekker, a Mr Leok Weerden (aka Rashid) and a Mr Tom Van Den Berg (Mr Van Den Berg) in Amsterdam.

Six email exchanges between the conspirators which pre-dated the investigation, during the period from 3 May 2006 to 18 May 2007, were recovered from the email account provider after the investigation commenced. They showed that: Jalalaty provided the appellant his bank account details “for the investment”; the appellant passed on news from Kinch to Jalalaty, including Kinch’s instruction that the appellant and Jalalaty should take $76,000 out of “existing funds if there is enough left” and split this amount; and Jalalaty asked the appellant what Kinch wanted him to do with “the drums”. They also referred to Jalalaty’s travels in Asia meeting “powerful and influential people” and various deals involving the appellant and Jalalaty, and in some cases implicitly Kinch, such as an order of “two containers of water” for $80,000, from which they would “make 20,000 dollars profit”. The emails also refer to an anticipated trip to Dubai in January or February 2007.

In May 2007, Jalalaty was recorded discussing with the appellant: food imports arranged with his business partner, Julian Holmes, in Dubai, which he intended to sell to “IGA” and “Harris Farm”; tracking down the whereabouts and assets of Mr Way (whom the appellant and Jalalaty held responsible for losing or stealing their $580,000 investment) with the assistance of the appellant, Roger Rogerson and Mr Frank Wheeler (Mr Wheeler); and Jalalaty’s debt owed to a friend.

Rashid and Mr Van Den Berg were recorded by Dutch police on 1 June 2007 discussing that “the faxes had been sent” and “the other would first like to have a … test sending”. It could be inferred that this related to the facsimile of 14 May 2007, referred to in par [16] above.

Telephone intercepts in that month also record continued attempts to trace the lost investment with Mr Way, with the assistance of the appellant and Mr Wheeler. In those communications, the appellant was recorded as saying that Mr Wheeler often referred matters to him at the NSWCC if it appeared that there had been a fraud that the appellant would want to investigate. The intercepts also showed that the appellant made checks at the NSWCC (using the AUSTRAC database) and confirmed to Jalalaty that money given to Mr Way had been transferred out of the country. On 15 June 2007, Mr Wheeler brought Mr Way to the NSWCC premises to meet with the appellant. The appellant told Jalalaty that Mr Way gave him the details of the people with whom he had invested the money and that recovery of the money from Mr Way himself was “hopeless”.

Around this time, members of the Haklander syndicate arranged a shipment of two boxes of sample food products from Dubai, purporting to be from MDL Food, to BJ’s Fine Foods. A fax purporting to be from MDL Food sent from the Amsterdam internet café was received at Jalalaty’s home on 19 June 2007. The fax referred to the consignment and MDL’s ability to ship goods in large shipping containers and advised that MDL’s representative in Dubai, Daniel Cloutier (Mr Cloutier), would be in contact with Jalalaty to finalise documents. Agent Watt gave evidence that Mr Cloutier was an alias for the Haklander syndicate member, Jan Plas (Mr Plas).

On 16 June, Jalalaty arranged for $145,000 to be sent to Kinch to provide a partial refund for the money which Kinch had advanced to him. The following day, Jalalaty arranged to meet an unknown male connected to Kinch (the Portuguese mate). He called his wife at the time and told her that he needed a further $360,000 to get Kinch “off his back”. On the same day, he called the appellant and told him that he had to pay Kinch $500,000 and that he was trying to “scrounge” together everything he could to meet his debts.

On the same day, Jalalaty was surveilled going into the Bondi Junction Westfield shopping centre and exiting an hour later with an unknown man who was alleged by the Crown to be the Portuguese mate. Jalalaty showed the man a box and its contents in the boot of his car. Agent Watt said that the box resembled one of the several boxes sent by the Haklander syndicate, which had been inspected by authorities before being sent on to Jalalaty.

Agent Watt gave evidence that on 20 June 2007, Mr Cloutier/Mr Plas called Jalalaty from Dubai, saying that he had information that the samples had been received and confirmed this with Jalalaty. The intercepted conversation showed that Jalalaty asked if coconut could be shipped in 25 pound bags and advised that coconut milk required a nutritional information panel to get through Customs. On 22 June, Jalalaty viewed a draft email message drafted by Kinch which said, “have any news on the salts … that is very important … as i am under pressure to make a decision if i want liquids or powdered products its more work but personaly i prefer the milk what are your thoughts”. Jalalaty responded in a draft email the same day saying “It doesn’t matter which products you send … I only told you that I had a market for the Coconut Milk and for the shredded coconut as they are big sellers. The salts can be sold but in smaller volumes”.

Later that day, Jalalaty rang the appellant and told him that he had emails overnight and had sent another email to the appellant. On the following day, Jalalaty read another draft email message from Kinch in which Kinch assured Jalalaty that he would have his first delivery in a matter of weeks and said that he wanted to “push the c/milk as the main line”.

In the meantime, on 25 June 2007, Mr Way emailed Mr Wheeler referring to an agreement made at the meeting with “Mr Stanton, Assistant Commissioner of the NSW Crimes Commission … held across the road [from the Commission] in a coffee shop”. The email also referred to Mr Wheeler’s insistence that Mr Way personally reimburse the Jalalatys. On 25 June, this email was forwarded by Mr Wheeler to the appellant and the appellant and Jalalaty discussed it later that day. In the discussion, Jalalaty wanted confirmation that what Mr Wheeler was doing was legal.

On 26 June 2007, a Haklander syndicate member, Rashid, pretending to be from Dubai, called Jalalaty to let him know that he was trying to send faxes through to him (Jalalaty). A fax dated 25 June 2007, purporting to be from MDL Food, was then sent from a Dubai coffee shop and received by Jalalaty. It referred to a shipment of coconut milk and powder and further samples of goods which would be ready for shipment in two to three weeks. The fax referred to Mr Cloutier as their representative.

On 28 June 2007, Jalalaty received instructions by telephone from an unknown woman to transfer $5,000 into the appellant’s bank account.

On the afternoon of 29 June 2007, Kinch was observed meeting Rashid, Mr Van Den Berg, Mr Haklander and Mr Dekker in Amsterdam.

Agent Watt gave evidence that throughout June, the appellant and Jalalaty agreed to meet in person on at least nine different occasions and they were observed meeting near the NSWCC on 13 and 19 June 2007.

The appellant, Jalalaty and Kinch remained in email contact throughout this month.

On 1 July 2007, Kinch told Jalalaty that he had met a sales manager who was “happy to go on”, but warned Jalalaty not to mention “in any way, shape or form anything to do with your ex mrs job or maurice’’s business as this would finish the whole thing”. The reference to “your ex mrs” was said to be to Ms Jalalaty, who had previously been an AFP officer, while “maurice” referred to the appellant.

In early July 2007, Jalalaty told the appellant that he had some receipts of money transfers to the appellant.

There were frequent communications between Kinch and Jalalaty in August 2007, using a number of different aliases and discussing various products and investment opportunities which Kinch had investigated and passed on to Jalalaty. On 6 August 2007, Jalalaty emailed Kinch, “I am seeing my girlfriend today as I miss her and havent seen her for a while. Her parents are very strict so we have to be very sneaky about seeing each other”. The following day, the appellant and Jalalaty spoke on the phone and agreed to meet that afternoon for the first time since July.

On 15 August 2007, the appellant called Mr Wheeler and advised him not to send a letter to the directors of the company in which Jalalaty’s money had been invested, which purported to summon them to a hearing before the appellant at the NSWCC, because that was not how it worked.

On 16 August 2007, Kinch asked Jalalaty to give the appellant some receipts to “give to Jojo”, which was an alias for Kinch. Later that day, Kinch complained to the appellant that he (Kinch) had told Jalalaty that the appellant could have (within reason) whatever he needed and did not understand why the appellant had to get him (Kinch) to tell Jalalaty and why they had to explain everything to Jalalaty.

On 17 August, a conversation between the appellant and Jalalaty was recorded in Jalalaty’s car. They discussed possible jam importation and the sugar content of jam.

Around 25 August, Jalalaty was recorded checking various bank account balances and had approximately $451,530 in one account and $240,090 in another. The appellant was also recorded accessing his online banking service, which showed debts of $86,932.23 and $26,150.47. He was recorded making a payment of $5,000 to “AW & GA Newton” on 21 August 2007. Anthony Newton (Mr Newton) was subordinate to the appellant at the NSWCC and gave evidence at the trial that he had mortgaged his house to lend the appellant $200,000.

On 28 August 2007, Dutch surveillance observed Kinch meeting with Rashid, Mr Haklander and Mr Dekker in Amsterdam. On 29 August, Jalalaty read a message from Kinch which said “I had a meeting with the sales manager today, he explained about the new rules concerning import licences etc, anyway all is in order and they will send you mail tomorrow and the products will be with you soon”. Jalalaty responded with an acknowledgement signed “Bruce sales and Marketing Manager”.

On 5 September 2007, Jalalaty received a fax dated 30 August 2007 addressed to BJ’s Fine Foods, purporting to be from “Elegant Hosiery (Pvt.) Ltd” in Lahore, Pakistan. It advised him that Elegant Hosiery had been nominated by MDL Food to supply the export of “Pakistani Basmati Rise” to Australia. It also said that the three to four week delay was caused by Australian Customs checking the “company, factory, goods and container” at the point of departure and advised that all necessary documents would be forwarded to Jalalaty in time for collection.

On 6 September 2007, Jalalaty advised Kinch that he had received nine pages of documentation regarding the first shipment. The same day, Kinch emailed the appellant about “a bit of gossip” that “ron bullit and dirk are both in the hospital in Belgium,, arms and money problems”. He also appeared to pass on new email account details. The next communication between Kinch and the appellant, according to Agent Watt, was saved to this new email account.

On 9 September 2007, Jalalaty received a fax from Elegant Hosiery setting out “the final details of the shipment”. On 10 September 2007, Jalalaty told the appellant that he had ordered a container of rice, had the bill of lading and that “all my documentation and eh my warehouse is good it’s all clean and the pallets are all there ready to unload”.

The appellant and Jalalaty met on 15 September 2007 at a café in Wahroonga. Their conversation was recorded by a listening device. In the course of that conversation, Jalalaty said to the appellant, “how long would it take for someone to say what the fuck’n what’s Elegant Hosiery doing selling rice is that silly”. The appellant replied, “all sorts of companies do all sorts of stuff”. Jalalaty then complained that the price for the rice was above market price, but he did not pay anything “that makes it uh $6 a bag”. Jalalaty went on to say that “I’ve got everything they never sent me a sample of rice but you don’t need to and and Pakistani rice is known as the best rice in the world that’s not a problem but the price is not right but it’s close to it all documentation is all spot on and it’s already been checked by AQIS [Australian Quarantine & Inspection Service] Australian AQIS over there”. Jalalaty said that there was 17 tonnes of rice. He said that he did not order it but that it could be sold. The appellant asked where it was and Jalalaty replied, “it arrives here on the 10th of October”. The appellant said, “you don’t even know what it is you don’t know if it’s rice or it’s not rice” and Jalalaty responded, “no it’s already been checked by Australian customs”. The appellant said that Jalalaty should keep it at his (Jalalaty’s) warehouse.

Later in the conversation, the appellant asked “so you’re thinking this is just rice” and Jalalaty replied, “I don’t know I think it is because he is just testing the water”. The appellant also said that once it arrives, “you just don’t know what you’ve got either” and Jalalaty replied, “now that I know it’s coming I’ve already spoken to enough people as soon as it arrives hey listen your rice is here”. There was then a discussion about customs in Australia, Jalalaty saying, “what they’re worried about they’re not worried about drugs they’re worried … about things getting in like with rice little weevils”. The appellant told Jalalaty that Customs still examine incoming goods and Jalalaty asked what Customs looked for. The appellant replied, “Customs look for wrongly described goods um undervalued goods umm prohibited goods of any sort including drugs like anything prohibited wrong description of goods”. A conversation to the following effect then occurred:

Subsequently, the appellant made the following remarks:

The appellant told Jalalaty that the olive importer got away with it because he said that he did not know anything and co-operated with the police. Jalalaty said that that was what he would do. The appellant responded, “the only thing you’ve got to have clear in your head is how it started how did you first get in touch with these people”. The appellant then set out a detailed account of how Jalalaty could say he came to know the exporters and that if anything was found, he should say, “they shouldn’t have sent” it and “I’ll help ya hang the bastards”.

Agent Watt gave evidence that in 2002, the appellant was involved in the NSWCC investigation of the olive importer with the orange drums.

Jalalaty and the appellant then discussed their financial difficulties. In the course of that conversation, the appellant made the following remarks:

Later in the conversation, Mr Jalalaty asked about using internet cafés and the appellant replied:

On 17 September, Jalalaty confirmed some of the shipping details with Kinch via email and asked if it all sounded right to him. Later that day, Rashid called Jalalaty to ask if the second shipment could be sent. Jalalaty said yes and asked if it was rice and Rashid said that yes, the second would be just rice, but the third and fourth might have different goods, as agreed. Jalalaty said that he would have to discount the rice to sell it and Rashid said, “this is the special rice you know what … with the vegetables and everything in it”.

On 23 September 2007, the appellant asked Jalalaty for $9,000 to cover some of his expenses. The amount of $9,000 was deposited by cheque into the appellant’s account on 27 September 2007.

From about this time on, there were a series of conversations between Jalalaty and persons from Pakistan and between Jalalaty and Kinch concerning difficulties in getting the bill of lading in respect of the rice shipment. It is unnecessary to set out those conversations in detail.

On 27 September 2007, Ms Jalalaty told Jalalaty that she had received a fax from Pakistan requesting US $6,231 immediately. On the same day, Jalalaty told her that the $9,000 for the appellant “comes off the purchase price of the rice”. Jalalaty also received a further fax purporting to be from Elegant Hosiery confirming the first shipment and forecasting shipping dates for the second, to contain “Pakistani Basmati Rise”.

On 28 September, Jalalaty told the appellant about the further request for money from Elegant Hosiery. The appellant told Jalalaty that the investment of $580,000 that Jalalaty had lost with Mr Way appeared to be a common form of scam and the appellant would contact his “FBI mate” to look into Jalalaty’s case.

On the same day, Jalalaty made inquiries with the shipping company about the status of the first shipment and organising a Customs agent. On the following day, Ms Jalalaty transferred the Australian dollar equivalent of $6,300 to Elegant Hosiery in Pakistan.

In early October 2007, Kinch told Jalalaty to “check the seals on the container to see if they are correct” once the shipment arrived. Agent Watt gave evidence that if the seal number on the received container did not match the seal number according to the bill of lading, it would indicate that Customs or the Australian Quarantine & Inspection Service (AQIS) had broken the seal to examine the contents.

On 3 October 2007, Rashid was told that his container had arrived in Sydney Harbour “so please arrange the document and send there”. The person speaking to Rashid told him that he still had the bill of lading and Rashid would have to pay $8,700 to get it.

The first rice shipment arrived in Australia on 4 October 2007, but there was a significant problem with the money transferred to Elegant Hosiery. As a result, the bill of lading was not posted to Jalalaty at the time of shipment and the majority of communications with Kinch in October concerned Jalalaty’s attempt to take possession of the shipment. During October, Jalalaty received a number of faxes from Elegant Hosiery and MDL Food. He was also in frequent contact with “Raza from Pakistan” and “Rashid from Dubai”. After more than two weeks of back and forth between Raza and Jalalaty trying to settle the problem with the money transfer, Raza told Jalalaty on 15 October, “this is a problem from eh Netherland Netherland side”.

On 17 October, Rashid told Jalalaty that the problems were caused by their “Commissioner” in Pakistan (apparently a reference to Elegant Hosiery). Rashid told Jalalaty to pay the amount asked for by Elegant Hosiery, less the amount he had already transferred directly to Elegant Hosiery. On 19 October 2007, Rashid confirmed to Jalalaty that the Elegant Hosiery contact was “Razak”, but that he had been keeping the money and they would not use him again.

On 22 October 2007, Jalalaty received a call from Raza who told him to transfer a further US $58,000 to Elegant Hosiery. On 24 October, Ms Jalalaty transferred $30,587 to Razbeek of Global Bizz in Pakistan, pursuant to instructions in a fax from MDL Food of 20 October 2007.

Kinch sought frequent email updates on the status of the shipment from Jalalaty.

On 15 October, the appellant wrote Kinch a message stating that he was hearing stories in Australia about “poms and others who live in Spain and Portugal” (Agent Watt gave evidence that Kinch spoke with an English accent and had lived in Portugal) and a number of other persons “who do business here”. He said that people were “hearing things they shouldn’t” and wanted to know if Kinch could assist. Kinch replied that he would try to help and he gave the appellant detailed information on what he knew about the people that the appellant had named, but said that he did not move in those circles anymore. He warned the appellant that one of the men mentioned “has contacts in redfern plus feds”. A few days later, the appellant wrote to Kinch saying that he was “looking forward to a time when none of this matters and we can meet and talk like normal people, without strings attached and people monitoring every move”.

On 22 October 2007, the appellant was observed meeting Jalalaty at a café near the NSWCC. Part of the conversation was recorded. The appellant complained about his dire financial situation and they seemed to discuss an offer that someone had made to Jalalaty to help transfer $3 million out of America and into Australia, on which he would receive a one third commission. The appellant suggested that it sounded like a “Nigerian scam”, too good to be true and Jalalaty should consult Mr Wheeler, who had met the person making the offer.

When Kinch learned, on 24 October 2007, that the bill of lading had still not been provided, he wrote to Jalalaty saying, “I’m really tired of these children, i will be seeing there mom later and depending on what is said I will decide whether to bother with them”. The reference to “their mom” was presumably a reference to those controlling the Haklander syndicate.

On 25 October 2007, a conversation between the appellant and Jalalaty in Jalalaty’s vehicle was recorded. Jalalaty told the appellant about all of the difficulties he had been having with the first shipment and the confusion between Rashid, “the factory” (Elegant Hosiery) and Kinch. The appellant said that he could speak to Kinch, but that Jalalaty told him that it was now “all good” and all he wanted to know was whether the container had “been tampered with”.

On 30 October 2007, Jalalaty advised Kinch that the container had arrived and would be checked by “quarantine not Customs”.

The shipment was received on 7 November 2007, after being fumigated a second time. Jalalaty expressed concern to Rashid that the fumigation process involved every item being removed from the crate and Kinch emailed Jalalaty asking if any of the packets were opened during the inspection. Jalalaty reported back that the inspection was triggered by loose grains of rice not having been cleaned before the container was sealed. Kinch told him to go ahead and sell all of the contents of the container. Kinch said that he had spoken to “Rash mom” and would tell her about the “cleaning rota”.

Jalalaty’s communications with Raza and Rashid continued throughout November concerning outstanding and missing payments relating to the second shipment, without resolution. On 4 November 2007, Kinch complained to the appellant about Jalalaty, describing him as “a complete walter mitty”. The appellant replied, apologising for “Mr Bean”, saying that he had “me fooled well and truly”. On 12 November 2007, Kinch asked the appellant to keep an eye on Jalalaty and the appellant replied that while Jalalaty was an asset, because he knew buyers for the bigger shops, they should keep “her [Jalalaty] very secret to avoid pressure from other growers, suppliers, vendors etc”.

On 13 November 2007, Kinch told the appellant that Jalalaty kept “name dropping and having weird conversations with” the supplier and factory who “do not know anything about anything”. He also told the appellant that he was planning a meeting with Jalalaty “where I saw her here with you” and that he was working hard to get the projects back on track.

Each of Jalalaty and Kinch were in Dubai between 13 to 15 November 2007. On 21 November, Jalalaty was recorded as saying to an unknown person, something to the effect of “When they import the drug right it comes in a form and then they pour the acid over it and the product cleans it and crystallises it and it uses hundreds of litres of it that’s what he told me”. At the trial, Counsel for the appellant did not accept that the words “when they import the drug” could be heard on the recording. Jalalaty then telephoned a Mr Michael Moraleda and discussed acetone that Jalalaty was selling. Jalalaty said that he was not concerned with price and said, “I just want it out of there because somebody finds it there how would I explain myself”. The following day, Jalalaty told the appellant that he had a guy sourcing product for him in Dubai named Mike Von Hohenberg (Mike).

On 23 November, the appellant and Jalalaty were recorded near the NSWCC discussing the first shipment and the Customs and AQIS process. Jalalaty said, “did you know I was seeing my mate over there”. The appellant responded, “I did know you’d gone he said um I dunno about ten days ago … I expect to be seeing Myrtle [Jalalaty] in a few days”. Jalalaty then said that he was talking to another guy called Rashid and “I was hoping we could catch up … with Rashid”. Jalalaty then told the appellant that he met Kinch and his “Portuguese mate the baldy guy” at the Emirates Mall in Dubai. He said that the Portuguese mate raised the question of the money and said “I know I’ve already spoken to ah Maurice [the appellant] and he said if there’s anything we can do he said we’ve got people in all the places”. The appellant responded, “they’ll do some serious debt collecting”.

In the conversation, Jalalaty and the appellant discussed the fumigation of the first shipment. Jalalaty said that he had gotten to know the chief quarantine officer very well and he had showed him how they slashed some of the bags to look for weevils. He said that he asked the quarantine officer if he could guarantee that his next container would be checked because he wanted a good product. He said that he told the quarantine officer that there was another shipment before Christmas. Jalalaty said that he would organise it and there would be 60 bags in it, amounting to 300 kilos. The appellant said “right down the back of the container … hopefully”.

Jalalaty also told the appellant of a conversation he had had with Rashid where he (Jalalaty) said that he had “other products happening” and said that he asked Rashid, “how do I know when it’s coming in and how much it’s going to be” and Rachid said “first will probably be sixty bags of five kilo”. He said that Rachid asked him how many bags there were in a container and Jalalaty responded “about four and a half thousand”. Jalalaty and the appellant then discussed the amount of money that could be made from 60 bags of 5 kgs at $100,000 a kilo. There was also discussion about the possibility of detection.

There was then a discussion about who would pick up the next shipment and Jalalaty said that it would be done by “my Portuguese mate”. Jalalaty said that he would come and pick up 30 bags and then return them and he (Jalalaty) would destroy them. The appellant asked if, when he took the bags away, the bags were marked with something that could be linked to Jalalaty’s shipment. Jalalaty said, “they’re inside the rice bags he takes”. Jalalaty explained that then the people took their products out, gave them back the empty bags, and he destroyed them. The appellant said that it was not good that people knew that it came in rice. Jalalaty then said that he could have the Portuguese guy do it in his (Jalalaty’s) factory, “take them out take out the leave the bags there that would be better”. The appellant said “that’s what I’m saying what he [the Portuguese mate] could do when you’re not there … is he should only take the inner bags he shouldn’t take rice bags so people can say oh I recognise that rice bag … as soon as they link it to rice bags they start checking on rice”.

On 28 November 2007, the appellant was asked by an administrative manager at the NSWCC whether Kinch was still an active informer. He initially said yes and then changed his mind and said that his status had changed to inactive.

In this month, Jalalaty began communicating with Mike who was identified by Agent Watt as Mr Von Hohenberg, a member of the Haklander syndicate.

On 5 December 2007, Jalalaty complained to Rashid that he had now paid US $60,000 for products worth US $17,000 and this did not look good to his accounts people. Rashid responded, “Mike is in Dubai and will contact you”. On the same day, Jalalaty told Kinch that he had received an email from Mike and sought confirmation as to whether he could discuss pricing with him and whether Rashid was still around. Kinch replied that he could discuss pricing with Mike but that they should “just stick to a few things … i am waiting for news from ras mom”.

On 5 December 2007, a conversation between Jalalaty and Ms Jalalaty was recorded in which she asked how long the relationship with Kinch was going to continue. Jalalaty responded, “well talking after a white Christmas once we get the first one through then we’ll decide. I spoke to my little mate he said you tell me when to stop. He said to me ah and I said I’ll do as you (indistinct) said”. Ms Jalalaty replied, “I just wanted … to know that was all but I would’ve thought that as seeing how the last one was rice if they’ll get it in the next one”. Jalalaty replied, “yeah but this one’s gotta come in I’ve got to un I’ve gotta open every single box … find the three hundred bags no sixty bags put it back in there sell em (indistinct) bags of rice go through the whole (indistinct) container (indistinct) tonnes you couldn’t notice if you (indistinct)”.

On the next day, Ms Jalalaty, in the context of a discussion about payment for freight and fumigation, asked Jalalaty “is that one that I paid for the other day is that less” and Jalalaty replied, “na that’s the next one that the one that’s … the one we want when that comes through hopefully we’ll be debt free .. we will be debt free from those people”.

On 12 December 2007, Kinch told Jalalaty “we have everything in place for the new contacts so lets get this headache one over”. The same day, the appellant and Jalalaty were surveilled having a conversation near the NSWCC. The conversation was recorded. In the conversation, the appellant said that Jalalaty was paying too high a price for rice and Jalalaty agreed that it was 30% above market rate. Jalalaty said that he needed to make sure that if an accountant asked why he paid $13 for rice, when he only sold it for $5, he was going to say that he was “trying to buy market share”. Jalalaty said that he was “documenting everything just like you [the appellant] told me”. He said that on Kinch’s instructions, he would only use public internet sites to check Hotmail. Jalalaty said that he had not heard from Kinch (referred to as “B52”) for a whole week. The appellant said that Kinch had told him that he was trying to get some “Christmas presents done early to avoid the last minute rush”. Jalalaty responded that he had met the “Portuguese bloke” who was going to be there when the stuff arrived, “which is all fine”. He said, “that doesn’t bother me all good if they send me one container of milk powder that’s all my money gone cause that milk powder is one hundred grand”. Jalalaty said that he had already paid for the next container.

On 19 December 2007, Jalalaty was recorded on a number of calls to Mike. Jalalaty told Mike that he had already paid US $60,000 to the people from MDL Food. They discussed the price at which Jalalaty could sell rice in Australia and Jalalaty told Mike that the price did not matter because he worked on commission. Mike stressed to Jalalaty that he must only speak to him and refuse to deal directly with the factory. On the same day, Jalalaty asked Kinch if he should travel to Germany to meet Mike. Kinch told him not to make any travel plans.

On 5 January 2008, Mike rang Jalalaty to discuss their business. He asked Jalalaty to come and meet him in Germany. Jalalaty emailed Kinch on that day to ask if he should go to Germany. On 7 January, Kinch wrote back and told Jalalaty to stay put “as i am waiting for rashes mom to give me some news .. if rash is not ready i will sack them and we can move forward with mike”. On 10 January 2008, the appellant and Jalalaty were recorded having a conversation near the NSWCC. There was a discussion concerning Elegant Hosiery and the first shipment. They also discussed the difficulties with payment in relation to the first shipment and whether Jalalaty should go to Germany. In that context, Jalalaty said “(indistinct) said to me hey look listen I’ve spoken to Rashid’s mum and looks like were back on track”. Thereafter, the following conversation took place:

Subsequently in the conversation, the appellant asked Jalalaty if he was doing what Kinch had told him to, in regard to only going to internet cafés, and Jalalaty replied that Kinch was using another email address.

The appellant asked whether Ms Jalalaty knew of the existence of Mike and Jalalaty replied, no. He also said that while she knew Kinch, she did not know that “he lends us the money”.

Subsequently, Jalalaty said that the way Kinch was going, “if we get the shipment through but within six to eight weeks you’ll [the appellant] never ever have money problems ever again you wouldn’t be able to spend the interest on the money”. The appellant replied, “look I don’t do anything silly I don’t do anything ridiculous I don’t spend anything ridiculous I have a good time”. Jalalaty said that Kinch suggested putting the money with him (Jalalaty) in the National Bank of Dubai and Kinch could guarantee 20% a year.

On 24 January 2008, Kinch was observed by Dutch investigators meeting with Rashid (Mr Weerdon), Mr Van Den Berg, Mr Haklander and Mr Dekker in the Netherlands. The next day, Jalalaty received a message, which had been sent earlier by Kinch, saying, “i have not had a chance to catch up with the girls” but have arranged “to have dinner with their mom tonight”.

On 14 February 2008, Rashid sent a fax to a Mr Nawaz in Pakistan, headed “Bashma International Rice Cooperation”, which included a list of things which had been agreed. It was in the following terms:

On 25 February 2008, Jalalaty received a fax from Mr Cloutier, attaching a draft email addressed to BJ’s Fine Foods, which stated that the agreed shipment which had been “scheduled earlier 2 months ago is now ready for departing. The new factory will send you the Bill of lading and original documents as soon as … the shipment has departed”. It noted that the payment had already been received.

On 27 February 2008, Jalalaty and Ms Jalalaty discussed their dire financial situation and Ms Jalalaty said, “the reality of the situation is that we’ve only gotta ride out probably another month until the the container arrives”. Ms Jalalaty said that Jalalaty could not keep giving money to “the little fella” (a term previously used to describe the appellant).

On that day, Rashid advised Jalalaty that the shipment was in process. The following day, Jalalaty informed Kinch of this and said that he would have the documents within five days of the shipment leaving. Kinch replied “I see the girls tonight xx OK”.

On 2 March 2008, Kinch wrote Jalalaty a message stating “i was with all the children’s parents a few days ago and a few of them where upset with your behaviour they showed me your mails etc, you did it again , you contacted the vietnamese company direct … i have managed to keep things on track for the moment but please stop and think before doing silly things.” The following day, Kinch complained to the appellant, “i do not understand mirtyle [Jalalaty] … she has done the same things as last time”.

On 7 March 2008, the appellant sent Jalalaty a text message that said, “nothing has changed from that list I showed you so the pressure is still on at my end … I have to survive that long. If you can work some magic it will repay itself soon enough”. On 9 March 2008, the appellant emailed Kinch advising that he found himself “needing 14.5 soonish”, which Jalalaty could not accommodate, and asking Kinch to transfer it to Jalalaty. Kinch agreed and asked if Jalalaty could be trusted to give it to the appellant. The appellant reassured him. Kinch asked the appellant to send him Jalalaty’s account details.

On 10 March 2008, Rashid informed Jalalaty that he was waiting for the bill of lading.

On 11 March 2008, the appellant and Jalalaty were surveilled meeting near the NSWCC. They discussed the risk of the container being searched by Customs. The appellant informed Jalalaty that “they only search suspect ones … otherwise they just all go through by the … tens of thousands”. The appellant also discussed his increasingly difficult financial situation. They discussed the money that the appellant had requested from Kinch and the appellant said, “I’ve got no way of getting it I need an account to send it to and it can’t be mine but I mean so can I give him yours … and that’ll take the pressure off”. Jalalaty agreed. The appellant said that he had asked Kinch for far less than he needed, but that if the situation was not resolved within a few months, he would have to go back and be honest with Kinch about the extent of his situation.

Agent Watt gave evidence that later that day, Jalalaty sent the appellant his account details.

On 11 March 2008, Jalalaty wrote to Kinch saying that “Maurice [the appellant] has extended himself so much and borrowed more than he can handle. … He is living beyond his means. I am selling stock for people to help him pay his debts”.

On 22 March 2008, a fax headed “M/S Malik Sons” of Pakistan, describing the contents of a 20 foot container of white rice, was sent to Rashid’s home in the Netherlands from Pakistan. On 26 March 2008, Kinch wrote to Jalalaty telling him that he “saw the paper for rash’s project, you [Jalalaty] should have or will receive the papers … you will receive the product in approx. 3 weeks … i have passed on the number for Maurice’s predicament and you will receive a call very soon”.

On 1 April, a meeting took place between Jalalaty and the appellant in Jalalaty’s car, which was recorded. Jalalaty referred to an email from Kinch saying, “it says ok you’ve already paid them so therefore they’re giving you stock which you already own so and they told you that they they they’ve got a customer for you but they haven’t told you who the customer is it’s all the stuff that you’ve told me in the past”. The appellant replied, “he [presumably Kinch] doesn’t tell me anything about all that cause you know I I I I think he wants me to be like a million miles away”. It appears from the conversation that Jalalaty handed the appellant some money and there was a discussion about whether it could be put into the bank account in one hit. The appellant said that “no one will notice the bank won’t care but if it goes bad just day well was strapped you um helped me out”. Jalalaty informed the appellant that Rashid had said to him, “I’m just waiting on your on your bill of lading”. He said, “It will be there in three weeks … but rash was meant to send me the bills of lading that gives you the ship number container number you trace it on … the website … and then you’re right”.

Later on that day, Jalalaty wrote to Kinch, “I met her today and delivery has been made”. That night, the appellant wrote to Kinch, signing off, “Thanks for your good wishes. Your extra hugs were greatly appreciated”. Agent Watt gave evidence that an amount of $9,450 was deposited into the appellant’s account on 1 April 2008.

On 8 April 2008, Rashid rang Jalalaty and told him that the originals were being sent by UPS courier and he would refax him copies. Jalalaty then wrote to Kinch, “Spoke to Rash today Documents on their way with UPS shipment”.

A faxed letter from MDL Food, attaching a certificate of origin for the rice and copy of the bill of lading was received by Jalalaty on 5 April 2008. The letter was signed “Rashid Abdar”.

The appellant and Jalalaty met near the NSWCC on 9 April 2008. There was discussion about the possibility of detection. The appellant said, “we just locked up two blokes this morning”. Jalalaty said, “are there’s a lot they’re catching a lot there’s a lot coming through isn’t there … if they’re checking every single container … but they can’t … they physically can’t can they”. The appellant said that it takes 80 seconds to put a container through an x-ray machine, “but a lot of fucking around to get it there”. Towards the conclusion of the conversation, the following exchange took place:

On 11 April, the appellant and Jalalaty discussed a new credit card that Jalalaty had just applied for which would allow him to borrow $100,000 at 2.9% interest “for 12 months”. He suggested that the appellant could make use of it to take “the pressure off you for twelve months” as he would only have to “come up with twelve hundred a month. The appellant replied, “hopefully we don’t have pressure for twelve months”.

On 16 April 2008, Jalalaty again texted Rashid seeking an update on the original documents. On 17 April 2008, Jalalaty wrote to Kinch stating, “My people here have checked the number that Rash gave us and the package is supposed to be here on the 24th. I have been asking for the originals but no luck as yet If the package arrives and the paperwork is not here,then the thing will sit around attracting unwanted attention”. On 19 April 2008, Jalalaty told Kinch, “It is now confirmed. The shipment will arrive on Friday. rash says the documents have been sent”. On 22 April, Jalalaty texted Rashid, “Shipment now ariving in 2 days please i need docs urgently”.

On 24 April 2008, Rashid received a fax at his home from a Pakistani number, containing a covering letter from MDL Food to BJ’s Fine Foods, which advised that the “original documents including Bill of Lading are forwarded to you by courier”. The fax also included copies of the bill of lading, a certificate of origin for the rice, an M/S Malik Sons packing list, a fumigation certificate and included a statement that “I HAVE nothing more 2 Send you”.

On 25 April 2008, Jalalaty told Kinch that the ship was “already here and my customs clearance people are waiting on me”. On 28 April 2008, Jalalaty received an “Arrival notice / Tax Invoice” from MISC Agencies (Australia) Pty Ltd (MISC), i.e. Customs, advising that the consignment of 537 bags of rice from M/S Malik Sons had arrived for BJ’s Fine Foods and setting out freight charges.

On 29 April 2008, Jalalaty texted Rashid, “We just opened the envelope and there are no originals but a demand to pay for wat i dont know wat the hell is going on can u please ring me”. The note (referred to as a “ransom note”) was recovered during a search of Jalalaty’s home. It said:

Thereafter, there were a series of messages passing between Kinch, Jalalaty, Rashid and other members of the Haklander syndicate, endeavouring to facilitate the obtaining of the original bill of lading and the consequent release of the shipment. It is unnecessary to set these out in any detail.

On 30 April, Jalalaty and the appellant met near the NSWCC. The appellant told Jalalaty that Kinch was in Dubai and Jalalaty asked if Kinch told him about “the fuck up we’ve had with this container it arrived last Thursday”. The appellant said that he would ring a Customs supervisor that day and ask about a report, “I’m writing like a summary and … if you don’t hear from me everything’s fine I’ll just send … you a blank message”.

The appellant then called a Customs analyst, Mr Gavin Whalebone (Mr Whalebone), and told him that he was “doing reference review for the Commission” in relation to the “Delgety Reference” and asked whether Customs had any evidence, “be it anecdotal or actual of um an increase in the brown powder”. After the call, the appellant sent a blank text message to Jalalaty. In his evidence, Mr Giorgiutti, the solicitor for the NSWCC, explained that the “Dalgety Reference” involved the supply of “brown heroin” from Afghanistan. He said that there was no reason why the Dalgety Reference required updating by the appellant at that time.

Contact between the various parties increased in May 2008. The appellant remained in contact with Kinch via the draft saved email system. The conversations, which particularly involved Jalalaty, Kinch, members of the Haklander syndicate and various persons in Pakistan, were primarily directed at obtaining the bill of lading. In that context, on 5 May 2008, Jalalaty received a call from MISC (Customs) advising him that they had received an email from Karachi telling MISC to export the container back to them. In a phone call, Rashid told Jalalaty that the persons making the demand were blackmailing them and they needed to go around them.

Jalalaty and the appellant met on 9 May 2008. Jalalaty told the appellant that Kinch had said that he was going to “have to step in and sort this matter out” and that he (Jalalaty) had replied, “yes meanwhile my arse is getting grilled the container’s sitting there with my name on it ah what do we do” and he said “speak to maurice [the appellant] and so far as far as far as he knows it it’s ok”. Jalalaty asked, “if someone was looking at it looking at me you would have known by now” and said, “my last email to my customs agent I said if this container wasn’t paid for then I should send the bastard back”.

On 12 May 2008, the appellant called Mr Whalebone to ask who he should ring with “some shit on information about some cargo”. Mr Whalebone told him to call Steve Mercer (Mr Mercer). The appellant then contacted Mr Mercer and told him, “I just got got a bit of info I thought I’d pass to ya all quiet in the western front is it”. Mr Mercer told him that it was and the appellant then told Mr Mercer, “he has heard very reliably that um a group of dutch guys have got a shipment of um of crystal MDMA … it’s in a consignment of of bath salts from china”. Mr Mercer told the appellant that he would do some checks and see what he could find out.

The appellant and Jalalaty had a further meeting on 13 May 2008. Jalalaty updated the appellant on the status of the container, the original bill of lading had still not arrived. The appellant said that it was “bad” and “if there’s some somebody with bad blood they’d make a phone call” and the storage company would likely think it was strange that it had not been collected. Jalalaty said that he thought Kinch should just “pay”. He suggested that they (he and the appellant) could find someone in Customs and give them “a hundred grant to get it out for me two hundred grand five hundred grand”. The appellant said, “then you’ve got to involve people … that’s where they come unstuck those people always get found out”. The appellant also said that it would be suspicious if the container was sent back and that the industry would be suspicious about two people fighting over one container of rice.

On 19 to 20 May 2008 Jalalaty sent and received a number of emails and made and received a number of calls regarding the shipment and tracking down of the bill of lading. Kinch faxed Jalalaty a copy of the documents that his associates had obtained on or about 20 May 2008. On 21 May 2008, Jalalaty confirmed with MISC in Sydney that he could bring the originals directly to them, pay the necessary charges and have the container released. On that day, the appellant and Jalalaty met near the NSWCC. Jalalaty updated the appellant regarding the situation with the container and the bill of lading. He told the appellant that he could not bring himself to ask Kinch for more money when he was in Dubai and they discussed the appellant’s dire financial circumstances. The appellant and Jalalaty discussed the ways in which they could be detected and the ways in which to move money into Dubai. In the course of the conversation, Jalalaty said, “but the thing is it’s not a finished product twenty … twenty-three”. The appellant said, “ah no so these are like chemicals and things like um crystal” and Jalalaty said, “yeah looks like rice”. Jalalaty also said, “the product itself won’t do anything to anyone like you opened it won’t do anything when you mix it with something else then it becomes something else”. The appellant said, “they’re making something whatever we don’t know”.

Jalalaty again described how the product would be removed from the rice bags in his warehouse and collected by his Portuguese mate. The appellant asked if they would “take it all in one go”. There was a further discussion of how the container might be screened. The appellant also cautioned Jalalaty against the use of “helpers” because “helpers is when you go wrong”.

Later that day, the appellant wrote to Kinch saying, “She’s [Jalalaty] painful. Met her today”. Kinch replied the following day saying, “I have at last fixed the problem”.

Jalalaty was booked into a slot for collecting his container and having a “tailgate” inspection at 1.00pm on 23 May 2008. On that day, he obtained the original bill of lading and took it to MISC in Sydney. At 3.30pm on that day, the appellant called Customs analyst, Mr Whalebone, but as he was on annual leave in Saigon, they only spoke briefly. The appellant then called Customs Intelligence looking for Mr Mercer, but was unable to reach him.

On the evening of 23 May 2008, Jalalaty wrote to Kinch saying that they had a 1.00pm timeslot but that there was a queue of trucks “a mile long” and “At 4.30pm there was only 2 trucks allowed to stay and the rest were told to come back Monday. Ours was left there incurring no more costs and we will be processed first or second on monday. … Today has been the longest day of life”.

Between 23 and 25 May 2008, the AFP examined the container and found no border controlled precursors.

The appellant and Jalalaty met at 8.44am on 24 May 2008 in Wahroonga. At the meeting, the appellant told Jalalaty about attempting to contact Mr Whalebone. On 26 May 2008, Jalalaty and Ms Jalalaty were recorded in conversation. Jalalaty told Ms Jalalaty that they were doing “a full unpack” and he was not sure if that meant he should play dumb or that they knew something, “which means … the container’s for B52 [Kinch]”. Jalalaty said, “there’s forty bags in there so I just need to be about two hundred mile ahead of them”. Jalalaty told Ms Jalalaty that the appellant had heard nothing. On the same day, the appellant rang Jalalaty, who told the appellant that he was having a terrible day because “i’m expecting a shipment through customs and they’re they’re fucking me around and my agent said that they’re un un loading everything”. Five minutes later, the appellant called Mr Mercer, the Customs liaison officer, to ask if he had anything “on that profiling stuff”. Mr Mercer told him that he had nothing.

On 27 May 2008, the appellant and Jalalaty arranged to meet near the NSWCC. Jalalaty asked the appellant, “why would they unload the whole container … unless they knew something”. The appellant referred to his conversations with Mr Mercer and said, “we haven’t heard anything that’s the point I spoke to the guy who was getting onto a plane to Brisbane yesterday afternoon I said how’s biz he said all quiet I said we all need something he said yeah I know like dead quiet he said ah we got five hundred five hundred and one pills of this coming we got that thing there we got that like he didn’t say a word”. Jalalaty asked whether he could be lying and the appellant replied, “wouldn’t need to unless they already knew the connection but that’s very pretty unlikely”. He said that that would give them “too much credit they’re never that good”. Subsequently, the appellant said that in the time that the shipment was delayed, they would have to open all the bags, find what they were looking for, test it and replace it with something else to deliver. He said it would have taken a lot longer and in any event, “they rarely run it live” like that. Jalalaty asked the appellant, “if you were in trouble would someone let you know” and the appellant said, “some people would yeah”. The appellant instructed Jalalaty that when the container was taken to his (Jalalaty’s) place, he should behave absolutely normally, “but don’t talk near the container … just … ring that bloke that wanted to buy the rice”. He also said, “you can start ringing a few people and say look are you still interested in rice we’ve got”.

During the course of the meeting, Jalalaty received a phone call saying that the container was being delivered that afternoon.

Later that day, Kinch wrote to the appellant, “i just heard from mirt [Jalalaty] she seems a little worried about her exam results, i told her to relax as she can not change anything ,any way keep your eye on her”. Shortly after, Jalalaty was told that Customs had unpacked the whole container and it would be delivered on pallets.

The rice was delivered to Jalalaty’s warehouse at 4.36pm on 28 May 2008. At 6.59pm that night, Jalalaty wrote to Kinch, “I finally got the kids home They look ok but I will need to keep an eye on them for a while”. At 11.51pm that night, the appellant read a message from Kinch which said, “just heard mirt [Jalalaty] is home from the doctors she says that the children are feeling a lot better , can you advise her to keep them off schoolnad leave them in bed as long as possible better not to remove any bandages until the doctor says”. On 29 May, the appellant told Jalalaty that Kinch had said, “just keep the children inside … and not to take the bandages off until the doctor says”. They discussed how Jalalaty could start giving the appellant “money on the record” very soon and how they would explain why he was doing it.

On 30 May 2008, Jalalaty called a former employee, “Benny”, and asked him if he wanted a 40 kg bag of rice and they arranged for Benny to come to the warehouse the following day.

On 31 May 2008, the appellant read a message from Kinch that said, “i am so happy that you are keeping an eye on mirt and the kids as i was really getting worries she did not seem to be couping that well,, i had a mail from her today and she sounded more relaxed”. On that day, Jalalaty received the following message from Kinch, “hi there . i do not like to bring bad news,, i just heard that ras mom and father where involved in a serious crash a few days ago!! ,, (i am not sure who they where driving for!!) they are both in there local hospital”.

Agent Watt gave evidence that between 29 and 30 May 2008, Rashid, Mr Haklander and a number of other members of the Haklander syndicate were arrested.

On 1 June 2008, Kinch sent an email to the appellant saying, “Can you ask Mirt [Jalalaty] to get a metal detector to take for the kids to go treasure hunting.”

The appellant was arrested on 2 June 2008.

In cross-examination, Agent Watt agreed that following the appellant’s arrest, while he and Federal Agent Venchirautti (Agent Venchirautti) were driving the appellant to the AFP premises, the appellant asked how much the police were alleging had been imported and was told 300-600 kgs. The evidence was that the appellant asked what the commodity was and was told it was pseudoephedrine. Agent Venchirautti gave evidence that he was not certain of the words used, but he thought that the appellant did refer to border controlled precursors and did not ask “what was brought in?”.

Subsequently, the appellant was interviewed in an interview room at the AFP Headquarters. His record of interview (ERISP) was tendered. In the interview, the appellant said that he knew that Jalalaty imported goods generally, but did not know anything about a conspiracy to import pseudoephedrine. He described his financial position as “poor … serviceable but not comfortable”. He said that he got “bits and pieces” of money from Jalalaty when he was behind in a payment and estimated that this totalled around AUD $15,000 to $20,000.

The appellant described various business plans that he had had with Jalalaty. He said that Jalalaty had said that he needed the appellant’s sales skills, that he would look at the documents, persuade people and be part of Jalalaty’s big sales team and that he hoped to make money.

The appellant was asked if he knew of any of Jalalaty’s associates and he named Julian (Holmes) in Dubai and Warren (Stevenson).

The appellant said that he went to Dubai “last February” with Louise Baker (Ms Baker) to meet Jalalaty’s partners. He said that Jalalaty paid for the airfares. When he was asked why Jalalaty paid for the airfares, the appellant said, “I suppose is the only answer, ‘cause he could”.

He was asked who else he met in Dubai and named Julian (Holmes), Roger, “Julia someone”, the “guy that designed The Palm” and “an informer who you obviously know about or would be interested in um, James Kinch”. He said that he had not known that Kinch would be in Dubai when he made the arrangements with Jalalaty.

The appellant said that he had known Kinch since he had become an informant in about 2001 and that he had given the NSWCC “some excellent jobs”.

The appellant said that he encouraged Kinch to “use his brain and his personality to get involved in normal things”. He said that at dinner in Dubai, Kinch became interested in some of Jalalaty’s importation ideas but that there was no discussion of a business venture.

The appellant was asked about his discussions with Jalalaty about rice and said that Jalalaty had been on a “buying tour” around Asia and had made a lot of contacts. He said that rice was a “real early possibility” but that nothing happened until a recent container of rice arrived a couple of months ago from Pakistan. He said that the container had bugs in it and he thought that Jalalaty had lost money on it.

The appellant said that there had recently been more talk about rice but that there were the same “problems with the Pakistanis”. In that context, he said that Jalalaty told him that Kinch knew the same people and was going to sort out the problem.

The appellant said that he did not know about the first shipment until it was over and did not know that Kinch was involved or had knowledge of it. He said that he never asked Jalalaty how it was that the person in Pakistan who was involved in the payment dispute knew Kinch. He said that he never thought that Jalalaty would import drugs. He denied any involvement in any “drug component” or having discussions with Kinch in relation to the two rice shipments.

The appellant said that he had no knowledge of the rice coming in until he first met Jalalaty, when Jalalaty had the MISC documents, which he estimated was “within the last couple of months”. The appellant said that he did not know anything about the first importation. He said that there had never been any discussion of anything other than rice that may have been in the consignment, but said, “there’s this underlying thing he spoke of many times about misdescribing goods. He never said he, he never said he had done that but he has talked about it in the past”.

The appellant said that Kinch had told him that he had nothing to do with the drug wholesale business, but was routinely approached by persons in the business. He said that he reported contact with Kinch if it related to “a job” but not when they talked about wives and kids and careers.

The appellant denied ever discussing making a considerable amount of money as a result of importing containers of rice, but stated that they did discuss “millions” in relation to other projects. The appellant was asked if Jalalaty ever gave him money on behalf of someone else and he said, “Are you talking about on behalf of Kinch? No, not that he has ever said”. He said that he knew that Kinch had provided money to Jalalaty for his business. The appellant said that he did not know how it was paid or when the arrangements were made, but thought that it was in the order of AUD $800,000.

The appellant said that Jalalaty had told him about an investment scheme that the appellant thought was too good to be true and he recounted Jalalaty’s experience losing money on the investment. He said that after Jalalaty had lost the money, he came clean that the money was from Kinch. The appellant said that he told Jalalaty that he could not help him, but put him onto a private collector, Mr Wheeler. He said that Mr Wheeler brought the person with whom Jalalaty invested the money, a Mr Way, to the NSWCC, as Mr Wheeler “brings a lot of clients to us”. The appellant said that he had done a basic AUSTRAC search for the money and saw that the money went everywhere and that recovery was hopeless.

The appellant was played some of the listening device recordings of his conversations. He said that it jogged his memory and he now remembered knowing about the first rice shipment before it arrived. He said that he remembered talking about the fumigation problems and that it was better to have it fumigated “over there” so that it did not arrive full of bugs and lose money. He agreed that he was suspicious about the conversation concerning Elegant Hosiery, but just thought that it was a bad name for a food company. He said that he did not think that Jalalaty was importing the rice to pay back Kinch. He said that he suggested that the first shipment may have been a test because it was a cheap commodity, it may have been a test in anticipation of more expensive commodities.

The appellant disagreed that he had given Jalalaty advice about what Customs looked for and claimed that what he said about Customs being distinct from AQIS was “pretty obvious”. He said that one reason he might have been explaining Customs x-ray procedures was that Jalalaty was going to pay him and he wanted to feel like he was contributing something.

He said that he told Jalalaty about an old job involving different coloured olive oil drums with MDMA inside because they “considered the worse case scenario”.

The appellant said that over his career, he tended to trust people and had “successfully turned criminals, significant ones, career criminals even, into ordinary people”.

In Jalalaty’s interview by the AFP, he was asked about the first shipment of rice. He said that he organised the shipment with MDL Food through a Rashid Abdar. He was asked if he spoke to anyone who was not a customer, but had some kind of interest in the container. He said, “Maybe, I don’t know. Maybe some friends”. He said that he had a friend who was in the State Crime Commission and said, “He’s helped me with my unfair dismissal case”. He identified this friend as Mark Standen.

Jalalaty was asked how often he spoke to the appellant, what else they discussed and if he recalled any times when they discussed the importation. Jalalaty said that they just discussed general things. Jalalaty said that he “wouldn’t know a drug if I saw it”. He was asked what was in the container and he said, “I have no idea. Product comes in, I just send it straight out”.

Jalalaty was asked if he had ever spoken to the appellant about how the police go about their business and said, “always … I’m just interested. I ask my wife, I ask everybody … what do police do”. He said that “if these people are doing something wrong, well they need to be put away”. He said that he would not know what Rashid looked like so would not know if he had met him in Dubai.

Jalalaty also said that he invested money himself and had been ripped-off. When he was asked where it came from, he said that it was his money, he still owed it and he was paying it back “bit by bit”. He denied that anyone gave him a large amount of money to invest which he lost and said that the money came from overdrafts and money he owed his customers, such as the “duck man” and “Steggles Chickens”. He said that he started importing other products to try and pay off his debts.

It is unnecessary to refer to these documents in any great detail. However, it should be noted that a confidential AFP memorandum created by the AFP’s liaison officer in the Netherlands was found in a box in the appellant’s office. The memorandum advised that a person travelled to Australia in January 2003 under the instructions of Mr Haklander to organise the storage of approximately one billion MDMA tablets and a quantity of cash, that Mr Haklander was known as “Fat Ron” and that the tablets and cash were expected to be stored in a self-storage unit in a similar manner to that used in a previous NSWCC operation, codenamed “Tahoe”. Agent Watt gave evidence as to the appellant’s involvement in Operation Tahoe.

Evidence was also given of emails between the appellant and Kinch from 3 October 2004 to 10 May 2008. In those emails, Kinch appears to provide the appellant with information on the movement of drugs and the plans of the Haklander syndicate. In many of the emails, Kinch appears to provide details of the type, quantity and method of various illegal importations which he became aware of, as well as of various other schemes and passes on the names and pseudonyms of various players. Kinch also said in one email, “i think you should have a word a find out just what i will be offered if i am prepaired to help with your enqueries”.

Federal Agent Katherine Fox gave evidence concerning an investigation into the importation of MDMA. It is unnecessary to deal with her evidence in any detail.

A number of witnesses gave evidence concerning the appellant’s activities whilst at the NSWCC. This evidence, as is most relevant, is summarised below. This summary is largely drawn from the Part 1A Document prepared by the Crown. It was not contended by the appellant that the summary, at least to the extent that it is reproduced below, was incorrect.

Mr Giorgiutti was the Solicitor to, and Director of, the NSWCC. He was immediately subordinate to the Commissioner.

Mr Giorgiutti became aware that the appellant was being investigated in July 2007. He assisted prosecutoring authorities by producing various documents, a number of which were tendered. He gave evidence as follows.

The NSWCC policy regarding informers and management of informer files was tightened in 2007 with the introduction of “G3”. After G3, all informer files were centrally managed by a Ms Baird and active files were re-ordered to conform to a standard protocol.

The appellant was an Assistant Director reporting directly to the Director, although from 1998, in practical terms, he reported directly to the Commissioner. He headed the investigative scheme codenamed “Gymea”.

The appellant and his team were involved in numerous investigations between 1997 and 2007 relating to different kinds of drugs, including methylamphetamines. In 1997, the appellant was involved in an investigation of a conspiracy to manufacture methylamphetamine, which involved the seizure of pseudoephedrine.

Gymea Team Operation Anchor (codenamed Tahoe by the AFP) was tasked with identifying the people involved in trafficking large commercial quantities of illicit drugs into Australia from intelligence sourced in Europe. It was specifically set up because it was believed that former or current police officers or government officials may have been involved in such importation.

One of the first pages in Kinch’s informer file was an AFP liaison communication from London passed to the NSWCC in relation to Operation Tahoe, naming a number of people of interest. In the document, which was dated 26 September 2002, Kinch was described as “a well documented drugs trafficker, historically based on the Birmingham area and Portugal”. The report stated that it was “further believed that if Kinch does set up in Australia he will, if not already commence large scale importations of MDMA into the country”. It stated that it appeared “that Kinch may well have been behind the recent Tahoe importations”.

By 3 March 2003, the investigation of Kinch by the Gymea Team was well progressed. Kinch was arrested on 14 March 2003. In a meeting of the Gymea Team on 17 March 2003, it was noted that after his arrest, Kinch had agreed to supply information to assist ongoing investigations in exchange for later assistance in court. He provided investigators with the location of a further AUD $227,000 and approximately $15,000 in foreign currency and 60 kgs of MDMA. He gave information about an accomplice likely to return to the location where the cash and tablets were stored and about another planned import of three to five million pills inside furniture, or ecstasy in liquid form. Kinch was given the codename “Hogan”.

The NSWCC had an informer management policy to govern the high risk nature of the informer/handler relationship to both parties. A system was necessary to enable the handler and agency to corroborate as much of what the informer said as possible and to review what the informer had told the handler over time to see if there were any changes in their behaviour or the way contact was initiated. These issues were highlighted in the NSWCC’s 2006 Informer Management Policy, which was reflective of the policy of previous years. The appellant was an experienced handler.

Kinch attended the NSWCC on 18 and 20 March 2003 and provided information in relation to ongoing MDMA and amphetamine importations and money laundering. Kinch foreshadowed that depending on his charges and bail situation, he could provide information concerning principals involved in the manufacture of mass quantities of MDMA in Holland and he named “Fat Ron” and “Pete” as Dutch principals. The information report generated on 21 March 2003 in respect of these disclosures noted that “A summary of that information has been detailed in an information report by Standen”. In cross-examination, Mr Giorgiutti agreed that, despite it being more than likely that such a report existed, it was never found.

Kinch became a registered informer in October 2003. His informer file was stamped “inactive” sometime in late 2007 or early in 2008. It stated that Kinch had provided accurate information which had been independently verified and that he was “well placed within an international drug importation syndicate based in the U.K. and supplying amphetamines produced in Holland to the Australian market”. The file showed that he had been charged with state offences of money laundering and supplying a commercial quantity of a prohibited drug, but that those charges had been withdrawn by the Office of Director of Public Prosecutions (NSW) (the NSWODPP), in two stages, by 27 January 2004.

A series of emails from the appellant to the NSWCC Commissioner at the time, Phillip Bradley (Commissioner Bradley), and a subsequent letter from Commissioner Bradley to the NSWODPP, showed that the appellant had been involved in making submissions to the NSWODPP in May 2003 to the effect that Kinch would plead guilty to the drug charges in exchange for the NSWODPP not proceeding on the money laundering charges. The letter attached a submission which stated, “Whilst Kinch is an important and active member of the Dutch syndicate, it is clear that he is not one of the principles. He is one of the workers, albeit an important one”. It set out the information Kinch had already provided and the valuable seizures that had been made. It referred to the fact that Kinch had provided information that the Dutch group had “laundered between $30 million and $40 million” since he had been in Australia. It stated that “He said that an amount of $2 million is still owing from customers in Sydney and that if he were on bail, he would be prepared to collect that money and remit it … under controlled conditions”. It advised that Kinch was prepared to complete a money laundering operation under controlled conditions to enable the NSWCC to take action. It also stated that Kinch had disclosed that the Dutch group had been considering whether to kill a potential witness who may have given evidence against Kinch and whether to help Kinch escape. The submissions noted the extreme risk that Kinch foresaw in providing information about the Dutch syndicate and noted that “he was firmly of the view that [a letter of assistance to the sentencing court] was far too transparent for the people who would be following his case with extreme interest”. The submission also stated that Kinch had consented to the forfeiture of cash and real estate, worth approximately AUD $1 million.

Federal Agent Christopher Symons (Agent Symons) became a co-handler of Kinch with the appellant, although this arrangement was not formalised until approximately one month after Kinch’s arrest. At trial, Mr Giorgiutti’s evidence was interposed with evidence from Agent Symons in order to maintain a chronological narrative of the appellant’s work at the NSWCC. Mr Symons gave the following evidence.

On 28 November 2003, the appellant sent a letter addressed to the Crown Advocate responsible for the prosecution of the charges brought against Kinch. The appellant noted his understanding that the NSWODPP had rejected Kinch’s no bill application. He reiterated the value of the information that Kinch had provided, including that it “led directly to the seizure of 229 kilograms of ecstasy”. He noted that the money laundering charge had already been dropped by the Director and that Kinch had forfeited $1,300,000 in assets. The appellant conceded that Kinch did not plead guilty to the commercial supply charge, as they understood he would once the laundering charges were dropped, but that Kinch asserted that they had misunderstood the terms on which he would agree to plead guilty.

The appellant noted that in any event, Kinch had continued to provide valuable assistance, much of which had been passed on to UK and Dutch authorities. The appellant’s letter did not appear in Kinch’s informer file.

A summary of the phone contact between the appellant and Kinch between 15 July 2003 and 15 February 2004 showed that Kinch had called the appellant 179 times in that period, the appellant had called Kinch 97 times and that they had exchanged 37 SMS messages.

Mr Giorgiutti gave evidence that approximately $1,200,000 of cash and property in Kinch’s control was subject to a forfeiture order, by consent.

Mr Giorgiutti had located an information report written by the appellant on 23 December 2004 and only recently recovered from the appellant’s personal directory on the NSWCC computer system. The informer had said, among other things, that Kinch would know where a large quantity of ecstasy imported from Europe was stored in Sydney. The informer described Kinch as a “big mover” of drugs who would know about the shipment, and gave methods and phone numbers for contacting Kinch in London. A soft copy of the report was located in the appellant’s private file directory and a hard copy was located in the informer file for the informant “China”, however, it was not disseminated to the Gymea Team, as would have been proper practice.

On 30 May 2005, a Dutch police officer emailed the appellant and said, “We still don’t know where Haklander stays. Can our friend H tell us something about the place where he stays”. The appellant replied on 21 June 2005, advising that he had not been in touch with H recently and “he is less and less interested in passing information because we are unable to get him what he wants (to come here)”. By this time, the earlier charges against him had been withdrawn.

NSW Police Inspector Rod Hennes (Inspector Hennes), then working with the Gymea Team, sent an email to a large number of Gymea Team members on 1 September 2005. The email referred to the appellant speaking with Kinch, who was allegedly in Spain. It said that the appellant and Kinch discussed a recent MDMA seizure from a Mr Paul Sukar by the Drug Squad. This was said to be relevant to Kinch as he was dealing with a large amount of pills to the Sukar brothers when he was active in 2002-2003. The email went on to say that Kinch (“Hogan”) asked “if ‘Keef’ (Mouse) was involved in that one, which Mark [the appellant] replied to the effect that he had no idea. Hogan [Kinch] added that he had a garbled message from Mouse indicating he might ‘take off’ because he thinks he is being looked at”. The email stated that the appellant did not take the matter any further. The evidence established that when Kinch was arrested in March 2003, he was in the company of an associate named Keith Catlow, who was also referred to as “Mouse”.

On 13 October 2003, Inspector Hennes sent a message to the Tahoe team, including a note that Kinch had told them that “the Sukkar’s were 1 of his biggest customers prior to his arrest. It would fit that [Kinch’s] boys would continue to supply to the Sukkars. Interestingly Mark S [the appellant] had a conversation with [Kinch] about the Sukkar arrest just afterwards and [Kinch] asked about ‘Keef’ [aka “Mouse”]. (Hopefully Mark didn’t spill the beans! – just kidding, I know you’r toooo smart for that)”.

There was never any investigation of Kinch in respect of the suspicions expressed by Inspector Hennes.

Mr Giorgiutti was referred again to the information report written, but never disseminated, by the appellant on 23 December 2004, which recorded a confidential source naming Kinch as a “big mover” of drugs. He was asked what normal investigations should have followed. None of the things that Mr Giorgiutti said should have been done actually happened.

Kinch provided information to the NSWCC that he used other money launderers in Melbourne. The NSWCC was never able to corroborate that Kinch laundered AUD $50 million to $60 million. On the basis of information provided to Customs by the appellant, implicitly originating from Kinch, on 6 September 2006, liquid MDMA was found in a shipment of oil lamps. The person responsible was not arrested before leaving Australia. Mr Giorgiutti agreed that once a method of trafficking had been uncovered by Customs, “only a dummy” would attempt an importation the same way again. This was the last recorded supply of information by Kinch to any Australian law enforcement authorities.

After the appellant returned from Dubai in January 2007, he told Mr Giorgiutti that Jalalaty had paid for his flights. Mr Giorgiutti reported this to the Commissioner. The appellant made no mention of having met Kinch, which NSWCC policy would have required him to do.

A statement of financial interest completed by the appellant on 15 August 2007 disclosed no gifts. A disclosure of a substantial gift of any kind, but particularly of substantial cash from Kinch or Jalalaty, would have prompted an investigation. Further, the appellant did not disclose the $200,000 loan from Mr Newton, or any interests or dealings with Jalalaty.

The new centralised system for managing informers, G3, was implemented in May 2007. It included additional considerations, such as not providing benefits to the informer which were not officially recorded, not deriving any benefit from any reward or any other benefit provided to the informer, never giving the impression that an informer had any privilege or immunity from legal processes as a consequence of the relationship and specifically disabusing the informer of any such misapprehension.

In 2007, Kinch was recorded as “inactive”. As far as Mr Giorgiutti was aware, the appellant did not make a contact report in relation to Kinch in 2007 or 2008.

On 11 October 2007, an information report was generated, recording information from the informer codenamed “China”, referring to the same people as mentioned in the document of 21 August 2007, “the Sukars”, and advising that a person had told the informer that he had a contact in the AFP who tipped him off that the police were aware of a drug importation. Mr Giorgiutti referred to the email written by the appellant on 15 October 2007, referred to in par [63] above. He said that the email disclosed details of the August and October 2007 information reports. Mr Giorgiutti said that the communication was not appropriate, as it gave information, with “the potential to expose persons who provide the information to us”.

Mr Giorgiutti spoke to the appellant on 4 June 2008, after his arrest. The appellant said that he had dealings with Jalalaty because he thought one of the schemes could be a winner. At a meeting with the appellant on 27 June 2008, the appellant expressed concern for the welfare of Kinch and went into lengthy detail about information Kinch had provided about a shipment of a prohibited substance packed in bath crystals.

Mr Giorgiutti was shown a copy of the advice provided by the Commonwealth DPP in relation to the 2003 controlled money laundering operation and agreed that it was found in the NSWCC in hardcopy by complete chance and not as a result of searches relating to the appellant. He agreed that if it had not been found, there would have been no documentary evidence within the NSWCC showing that the operation was the subject of an advice from the Commonwealth DPP.

Mr Giorgiutti was taken to an email exchange between Kinch and the appellant in which Kinch proposed a controlled money laundering operation on 21 March 2008 which he said might enable them to “bring a wealth of info … and get some terror stuff”. In one of the emails, Kinch said, “every one is scared of Pakistan at the moment and looking for other routes”. The appellant replied, “Yes very good reason to be scared of the Pakis at the moment”. Mr Giorgiutti was also shown documents recording the considerable work that the appellant’s team was doing at that time in relation to money laundering, in particular, in relation to a money exchange operated by a Pakistani person in Kings Cross. Mr Giorgiutti agreed that it was not appropriate and was forbidden for the appellant to communicate material relating to current investigations. He also said that the information should have been passed to the AFP and ASIO, given the reference to “terror stuff”.

Agent Symons gave evidence concerning a proposed controlled operation in October 2003. He stated that on 3 October 2003, he, the appellant and Kinch discussed $1,500,000 in cash that Fat Ron and another person were requesting for Kinch to transfer out of Australia. Kinch said that he could access the money within two hours, but refused to give control of the cash to the NSWCC. The controlled operation was planned for 31 October 2003. Kinch was tasked with making $250,000 cash available to the NSWCC no later than 30 October 2003, to provide sufficient time for counting and recording the cash before the controlled operation. Kinch attended on 30 October 2003 with a black sports bag containing about $300,000 and the money was returned to him the following day for the controlled operation. Kinch delivered the cash to the operators at the exchange point.

At a meeting between Agent Symons, Kinch and the appellant on 4 December 2003, Kinch expressed reluctance to assist the NSWCC any further, pending resolution of his court matters. On 27 January 2004, Agent Symons advised Kinch that all of the charges had been dropped by the NSWODPP. Kinch provided further information in relation to a major “Australian customer” meeting with members of the Dutch syndicate. He departed from Australia on 15 February 2004.

Agent Symonds gave evidence that the appellant had not said anything to him in the relevant period to suggest that he had the level of ongoing contact with Kinch that was revealed in the tally of phone calls and texts tendered. In cross-examination, Agent Symons agreed that calls in which nothing significant was said were often not recorded.

By the end of January 2007 or early February 2007, Commissioner Bradley learned of the appellant’s visit to Dubai and that his expenses had been paid by a person with whom he had a business relationship. Commissioner Bradley said that he was not aware of any contact between the appellant and Kinch in Dubai, which would have been cause for considerable concern. Commissioner Bradley said that he made it clear that it was not acceptable that the appellant had travelled to Dubai and had his expenses paid by a business associate.

Commissioner Bradley said that he was not aware of the unsecured loan from Mr Newton and would have made further inquiries had he known. He said that the appellant and Mr Newton had previously approached him for permission to become mortgage brokers and he refused their request.

Commissioner Bradley was taken to an email sent to him by the appellant in relation to Kinch’s charges and confiscation settlement in 2003. Commissioner Bradley said that it was not appropriate that Kinch’s charges were considered a “stumbling block” to the confiscation settlement. However, he clarified in cross-examination that it was not improper to bring the connection between the charges and confiscation orders, in Kinch’s mind, to his attention.

In relation to the submissions made to the NSWODPP in support of the dropping of the charges against Kinch, the information that Kinch was willing to plead guilty to the drugs charge, that the money laundering charges may be difficult to prove and that the assistance provided by Kinch could not be disclosed to the court, came from the appellant. However, in cross-examination, Commissioner Bradley agreed that it was possible that he may have been shown a number of documents and spoken to a number of people about Kinch before sending the letter and submissions to the NSWODPP.

Mr Newton met the appellant when they worked together at the AFP, the National Crime Authority and later, the NSWCC. He was aware that the appellant was a handler for Kinch at the NSWCC.

Mr Newton was also aware that from around 2006, the appellant had a business relationship with Jalalaty. He understood that the appellant’s intention was to eventually leave the NSWCC and go into business with Jalalaty fulltime. He said that he was told that the appellant was receiving income from his involvement with Jalalaty, including, over a period of time, $200,000. He said that he was told that the money was invested by Jalalaty and the person with whom they invested the money took it.

Mr Newton said that he lent the appellant $210,000 in early November 2006 to assist him to purchase a house for approximately $700,000. Mr Newton said that he was able to lend him the money by drawing down on his own mortgage. The intention was that the appellant would then cover the interest repayments and eventually repay the principal within a matter of months, as he would refinance the loan after purchasing the property.

Mr Newtown gave evidence that as part of his employment at the NSWCC, he was required to provide a financial declaration disclosing his personal finances and those of his family. He said that the appellant advised him not to disclose the fact that he had lent $210,000 to the appellant and Mr Newton did not disclose it.

Detective Superintendent Amanda McCormick, Commander John Beveridge, Mr Whalebone and Mr Mercer gave evidence of the appellant’s inquiries as to Customs procedures in relation to the search of containers and, in the case of Mr Mercer, whether following the appellant’s inquiry of him regarding a shipment of MDMA, an alert had been set up.

Ms Jalalaty worked with the appellant as an AFP officer in the late 1980’s. She then worked for the National Crime Authority before returning to the AFP and then resigning in 1995. On her resignation, she began working at Jalalaty’s wholesale game and poultry business. Sometime later, they established the business called BJ’s Fine Foods, which was predominantly a wholesale food business. She said that Jalalaty also established a business in Dubai with Julian Holmes called “Inspired Foods”. She said that she and her husband had a loan from the Commonwealth Bank and a $1 million loan from her sister.

Ms Jalalaty said that she remained in contact with the appellant after leaving the AFP.

Ms Jalalaty said that sometime in 2006, Jalalaty told her that the purpose of his trip to Thailand was to organise a loan from a friend of the appellant’s with the nickname “B52”, for the business to be conducted by BJ’s Fine Foods. Evidence established that B52 was a commonly used pseudonym for Kinch.

Ms Jalalaty said that in February 2006, her husband came home with a sports bag that contained $1 million in cash, which they kept in their bedroom wardrobe. She said that Jalalaty told her that the cash was given to him by a person he nicknamed, “Portuguese guy”. She said that she was aware that the money was a loan that would have to be repaid at some time but was not aware of the term or the interest rate. The money was to be used to buy products. Ms Jalalaty said that she was not aware of any additional money received from Kinch.

Ms Jalalaty said that after the money was lost, the appellant assisted the Jalalatys in their attempts to get it back. She said that the appellant organised meetings between the Jalalatys and Mr Wheeler and also took steps to find out whether the investment had left the country.

Ms Jalalaty was aware that in early 2007, Jalalaty, the appellant and “B52” (Kinch) met in Dubai. She said that she arranged the airfares for the appellant and Ms Baker.

In July 2007, while the Jalalatys were on holiday in Port Douglas, Ms Jalalaty said that Jalalaty told her that they would import a container of rice that would contain drugs as a means of repaying the $1 million debt owed to B52 (Kinch).

Ms Jalalaty said that she made payments to the appellant at the request of her husband. She said that she and Jalalaty used the cash from the sports bag in the wardrobe and it eventually started to run low. She had previously said that $500,000 from the sports bag had been invested with CWL, which was the money which was lost. Ms Jalalaty said that by 15 June 2007, there was about $145,000 left in the sports bag. It was understood that she and Jalalaty would need to return what they could to B52 (Kinch) via the “Portuguese guy” and by 16 June 2007, understood that B52 (Kinch) was looking for at least $500,000. However, by 18 June 2007, that figure had reduced to $300,000.

Ms Jalalaty agreed that by September 2007, she had in her possession a document indicating a requirement that they pay $6,231 to Elegant Hosiery in Pakistan without which they would not receive the bill of lading for the first shipment of rice. She said that she organised transfers to Pakistan consistent with Jalalaty’s instructions.

Ms Jalalaty explained, by reference to the recorded conversation with her husband on 5 December 2007, that at that time she expected that the second shipment of rice would contain drugs which would pay off their debt. On 6 December 2007, she told Jalalaty that she hoped that B52 would be “reasonable” and deduct from their debt the amount of money they had paid to the appellant. In relation to the phone conversation with Jalalaty on 20 December 2007, in which Jalalaty said that he was delivering a ham to the appellant, Ms Jalalaty explained that she put a ham and $20,000 in a box to be given to the appellant. Ms Jalalaty gave evidence that her husband told her on 30 April 2008, “According to security at Customs we are not on the radar he had reason to speak with him today ringing the head of Customs”. The “he” referred to the appellant.

Warren Stevenson (Mr Stevenson) gave evidence that he began working with Jalalaty in late 2006. In cross-examination, he accepted that he actually first met Jalalaty in late 2005. He said that he became aware of the premises occupied by BJ’s Fine Foods, on Chicago Avenue in Blacktown, in early 2007. He described it as a large warehouse with three levels of shelving where pallets could be stored by forklift.

Mr Stevenson said that when he first visited the warehouse in early or mid-2007, it was storing a large quantity of an energy drink. He said that there were also approximately 20 to 30 20 litre drums of acetone stored at the very back of the warehouse. He said that Jalalaty warned him to be very careful around the acetone as it was extremely flammable. He said that he was also told by Jalalaty that it could be used to manufacture Ecstasy. The acetone remained in the warehouse from the time Mr Stevenson first visited it until after March 2008, at which point there was some discussion about selling it. He said that it was ultimately sold for less than $1,000.

Mr Stevenson gave evidence that he was aware that two shipments of rice had been imported by Jalalaty. He also said that he was told by Jalalaty that Jalalaty had $1 million in cash in a cupboard in his house. Mr Stevenson was also aware that Jalalaty had lost a substantial amount of money in an investment and had asked the appellant to assist in its recovery.

In November 2007, Jalalaty showed Mr Stevenson a text message from the appellant requesting money and Jalalaty asked Mr Stevenson to transfer money to the appellant. On 28 January 2008, Mr Stevenson transferred $5,000 to the appellant. On 1 February 2008, he transferred a further $1,500 and on 27 February 2008, an additional $7,000, each amount originally provided to him by Jalalaty.

After the first shipment, but before the second shipment of rice, Jalalaty changed the locks of the Chicago Avenue warehouse and kept the only key. Mr Stevenson said that on 28 May 2008, he went to the warehouse and Jalalaty was there awaiting delivery of the rice. He said that Jalalaty appeared agitated and was physically ill. He said that the rice arrived later that day and he assisted Jalalaty with unloading it. The two men met the following day in Double Bay and Jalalaty showed Mr Stevenson a 15 kg bag from the second shipment.

Mr Way explained that he arranged an investment on behalf of Mr and Ms Jalalaty through his company, Consultants Way Limited (CWL), totalling $580,000. About half of this was invested and half was used, without the Jalalatys’ knowledge, to pay CWL’s debts. Although there were in fact no returns from the investment, CWL reported monthly returns of 25% to 30% to the Jalalatys, such that as at September 2006, the Jalalatys’ statement of account showed a balance of $2,384,000. CWL never received the principal back or any interest.

Mr Way said that in June 2007, he was visited by two large men who presented him with an acknowledgement of debt document for $860,000 and a guarantee and indemnity form for the benefit of BJ’s Fine Foods, for his signature. A few days later, Mr Way wrote to BJ’s Fine Foods recounting the visit and advising that he had spoken to police who informed him that it was “a most improper way to conduct a commercial dispute” and that in the future, they should approach him through a lawyer.

Mr Way said that he was later visited by Mr Wheeler, who told him that he had to come and see the appellant at the NSWCC the next morning, which he did. In the interim, Mr Way phoned the appellant, who told him that Mr Wheeler sometimes brought people to see him whom he (Mr Wheeler) thought may have done something wrong. Mr Way met Mr Wheeler in the reception area of the NSWCC the following morning. They then met the appellant, who took them into an interview room. They met for about ten minutes. Mr Way said that the appellant told him that it was not a formal interview so there would be no recording. He said that they discussed the Jalalatys’ transaction, with Mr Wheeler accusing Mr Way of being a director of the company that had failed to return the investment. He said that the appellant advised that he did not think it was worth the NSWCC’s time to investigate, provided that he (Mr Way) co-operated with Mr Wheeler. However, in re-examination, Mr Way accepted that the appellant may have said “I will leave it to you and Mr Wheeler to sort out and I hope I don’t have to see you again”.

Mr Way gave evidence that he asked the appellant if he was aware of Mr Wheeler’s business card, which said something to the effect of “discount on funerals” on the back and the appellant said something to the effect of “Frank [Mr Wheeler] has a funny way of expressing himself”. Thereafter, Mr Way said that he agreed to give Mr Wheeler all of the relevant documents.

Mr Way then gave evidence that he spoke to Mr Wheeler on a number of occasions and Mr Wheeler said things like “accidents can happen”. Mr Way eventually agreed to, and did, assign all of the debt owed to CWL, including that arising out of the Jalalatys’ investment, to BJ’s Fine Foods.

Forensic Accountant Domenico Rositano (Mr Rositano) was a forensic accountant who analysed the appellant’s finances. He said that the amounts deposited into the appellant’s accounts by Jalalaty, including unattributed cash deposits, totalled $203,555.50. The total incoming funds during the period, including these transfers, his salary and the loan from Mr Newton, amounted to $689,669.

Mr Rositano concluded that as at 30 June 2006, the appellant owed $86,881 on credit cards and continued spending against them. He said that the $210,000 loan from Mr Newton was received in the appellant’s account on 9 November 2006. He said that approximately half of it was used to pay off his credit card debt. However, by 30 June 2007, despite further deposits, the appellant again owed $112,869 on his cards. Mr Rositano said that the appellant’s total outgoings in the relevant period were $694,496.

Ms Baker gave evidence that she worked with the appellant at the NSWCC as a monitor from about September 2005 and was later seconded to ICAC in February 2007. She said that at the time that she was working as a monitor at the NSWCC, she was part of the Gymea Team Division.

Ms Baker said that she commenced a relationship with the appellant in August 2006. She said that he told her that he eventually wanted to retire from the NSWCC and get into business with Jalalaty importing or supplying energy drinks, seafood, water and meat.

Ms Baker said that the appellant took her to dine at expensive restaurants about once a month for the first six months of their relationship and then the frequency reduced to about once every two months. He also occasionally bought her clothing and gifts. She said that until March 2008, she and the appellant stayed at different hotels in Sydney from time to time, for which the appellant paid. She said that they would also go away for short holidays.

Ms Baker said that she asked the appellant where the cash he was carrying came from and he told her two or three times that Jalalaty gave him a couple of thousand dollars. He did not make reference to any larger amounts of money and did not say anything to her about having received a loan from Mr Newton.

In January 2007, Ms Baker travelled to Dubai with the appellant. She said that she was under the impression that the appellant wanted to go to Dubai with Jalalaty because he wanted to be more active in getting the business started, given that none of Jalalaty’s deals had yet eventuated. She said that Jalalaty paid for the airfares for the Dubai trip and that the appellant paid for the accommodation.

Ms Baker gave evidence that the appellant told her that Kinch (whom he called “Jimmy”) might be in Dubai while they were there. She said that he told her that Kinch used to be an informant and he was like an old friend.

Ms Baker said that she met Kinch in Dubai on 25 January 2007 at a dinner. At that dinner, there was no conversation about money already having been paid to Jalalaty. She said that she may have known at that point of time that Kinch was a current or previous drug importer, either as a result of her employment at the NSWCC, or the appellant may have told her.

The appellant gave evidence that he first heard of Kinch in around September 2002 through internal AFP and NSWCC communications. He said that he first met Kinch at the NSWCC on 18 March 2003, after his arrest, and he became Kinch’s co-handler. The appellant said that from an early stage, Kinch provided the NSWCC with information which led to the seizure of two substantial quantities of ecstasy. The appellant said that there was no “rule” or standard as to the level of contact between NSWCC officers and informers. He said that during the conversations he had with Kinch, they would talk about “all manner of things” beyond the ambit of Kinch’s role as an informer. The appellant explained that informers tended to respond well when treated “humanely, pleasantly, in a friendly manner”.

The appellant gave evidence that before Kinch left Australia in February 2004, he had a conversation or series of conversations with him about how best to stay in contact. The appellant said, “We readily reached the view that it would be unwise for him to be communicating or receiving communication from my Crime Commission computer”. He said that this was because Kinch was concerned that his criminal associates or overseas authorities might be able to access his computer. The appellant and Kinch agreed to use the draft email system. The appellant said that while he was familiar with the system from his line of work, he had never set up an account himself. He said that Kinch set up the accounts on each occasion.

The appellant acknowledged that many of his communications on the draft email system made use of metaphor and allegory. For example, he said that “Christmas presents” and “exercise machine” were metaphors for money and “keep them off school” and “not to remove any bandages” (see par [126] above) were medical metaphors that the appellant had originally introduced relating to the container of rice and in this instance meant, “not to sell the rice yet”. In cross-examination, the appellant denied that this was a code but conceded that he, Jalalaty and Kinch used the “same language when communicating”.

The appellant agreed that the frequency of contact with an informer would depend on the value of the informer. He said that on a scale of 1 to 10, he would rate the value of Kinch as an informer at 10.

The appellant explained that it was his understanding that by the end of 2004, Kinch had established legitimate business interests. When asked in cross-examination why Kinch was still supplying criminal information after embarking on legitimate business, the appellant said, “I never said he wasn’t in contact with them. He [Kinch] had always said that he maintained appearances with some people, with others he said he’s retired, and with others he would simply say to them ‘I’m already working’ which, in their world, means that you don’t ask questions unless you are invited to do so”.

The appellant denied having any telephone contact with Kinch during the period that the surveillance warrants were active, but acknowledged that they had, on at least one occasion, discussed an “intention” to do so.

The appellant said that he met Jalalaty through Ms Jalalaty. He said that by the end of 2005, he was considering a change from his career in law enforcement. He said that he developed an independent relationship with Jalalaty from 2005. He gave evidence of having acquired a provisional patent for a water saving device and of asking Jalalaty whether he knew people who would be able to assist in marketing the invention.

The appellant said that at some point in 2005, he and Jalalaty became more engaged in their discussions about a joint business enterprise. He said that Jalalaty proposed that they should acquire distribution rights to a number of products produced by a European company called Bavaria, including an energy drink called B52. The appellant also gave evidence of a proposal to import a clothing brand called Cross Clothing from Turkey.

In December 2005, Kinch expressed his desire to give the appellant a Christmas present. The appellant said that he accepted the idea as a nice gesture. Kinch intended the transfer of a sum of money to assist the appellant with corrective eye surgery. The appellant suggested that he transfer the funds into Jalalaty’s account, saying that “a transfer from the name James Kinch into my account would ring alarm bells at the Crime Commission” and that the NSWCC would not approve of the transfer.

The amount of the Christmas present paid into Jalalaty’s bank account was $47,500. The appellant said that he was surprised, as he had anticipated an amount of around $5,000. The amount was left in Jalalaty’s bank account and drawn as needed. In cross-examination, the appellant acknowledged that the NSWCC guidelines prohibited failing to report gifts received from informers. He also conceded that his receipt of $47,000 from an informer would be a very serious matter.

The appellant gave evidence that during 2005, he told Jalalaty about his relationship with Kinch and, in broad terms, about their dealings together. He also kept Kinch appraised of his own business plans with Jalalaty and said that Kinch told him that he thought the appellant “could do a lot better than being tied to the office”. He said that Kinch in turn expressed interest in the business, especially the Bavaria distribution rights and the Cross Clothing scheme and asked if he could assist from “the European end”.

The appellant gave evidence that at some point in early 2006, Jalalaty was on the “threshold” of acquiring much anticipated rights to distribute Bavaria products. When it appeared that the deal would fall through due to cash difficulties, Kinch said that if the “numbers stack-up”, his venture capital company may be able to provide finance.

The next communication that the appellant said he received was from Jalalaty who said, “I just met my new best mate” who “Gave me a million dollars in a bag”. The appellant dismissed this at the time as just “another Bill [Jalalaty] story”. When Jalalaty later insisted that he had received $1 million, the appellant assumed that, because of Kinch’s enthusiasm in the venture and his request relating to international transfers, Kinch had actually transferred a substantial sum of money into Jalalaty’s bank account by way of investment. The appellant said that the receipt of $1 million was never mentioned again.

Over the course of a number of conversations, the appellant formed the impression that Jalalaty was spending Kinch’s investment on various items setting up the new business. Jalalaty also told him that he was investing a sum of his own money with an American bank after being introduced to the scheme by some relations of Rene Rivkin. The appellant agreed to ask Kinch about a further investment in Jalalaty’s business in April 2006 of around $200,000.

The appellant said that during 2006, he and Jalalaty communicated a great deal about a variety of proposed business ventures. In this context, the appellant became aware that an associate of Kinch, James Doyle, had purchased a cleaning products company called “Germ Chase” in the United Kingdom and was soon to visit Australia. He said that Doyle was a person of interest to the NSWCC and the appellant wished to acquire Doyle’s telephone number for the purpose of surveillance. He said that he told Jalalaty that a friend of Kinch’s had purchased a cleaning business in the UK and was looking to start up in Australia and that if Jalalaty knew about where acetone could be purchased, in what quantities, and for how much, then “it may be necessary for the fellow who purchased the cleaning company to get in touch with him”. The appellant said that he thought that by these means, he might discover Doyle’s phone number.

The appellant said that Jalalaty did not understand his limited role, or that it was a subterfuge, and over-enthusiastically purchased $30,000 worth of acetone and a dispensing mechanism. On 24 September 2006, Jalalaty emailed the appellant asking what Kinch wanted done with the acetone. The appellant replied saying, “B52 [Kinch] apologised for the inconvenience”. However, the appellant said that Kinch did not know about the acetone and that he had made up his response to Jalalaty’s email. He said that he did this because he was “starting to get a sense of unease about the state of the business”. In cross-examination, he said that he did not believe that Jalalaty bought the acetone at all and was simply making up a reason to pocket business funds. However, the appellant gave evidence that by October 2006, he (the appellant) was “Getting slightly more involved [in the business because] because it sounded more promising”.

The appellant said that it was around August 2006 that he made the decision to purchase a house. He said that the decision related to “personal difficulties”, which was why he accepted Mr Newton’s offer of a loan. In cross-examination, he conceded that he had not been truthful with his mortgagee, RAMS, or Commissioner Bradley about his finances in connection with the purchase of the home.

The appellant said that throughout 2006, he and Jalalaty had been discussing a trip to Dubai in order for the appellant to meet a business associate of Jalalaty, Julian Holmes, and to see the opportunities in that market. He said that towards the end of the year, Jalalaty moved towards a January 2007 date for the Dubai trip and offered to pay for Ms Baker to visit as well. He said that it was unclear, until about a week prior to the appellant’s arrival, whether Kinch would also be in Dubai at the time. In cross-examination, the appellant maintained that while there was always a possibility of Kinch being in Dubai at the time of the trip, it was no more than that.

The appellant said that he understood that Jalalaty went to Thailand in March 2007 in furtherance of a tender for the supply of salmon fillets to the airline, Emirates. In cross-examination, the appellant was asked about an email that he received from Kinch on 13 March 2007 that included the details of the Sheraton in Bangkok. He said that he did not make a connection at the time and maintained that he did not realise that both men were in Thailand at the same time.

The appellant understood that Jalalaty had made a significant investment in an American bank. He said that he had not heard of Mr Way. He said that he had heard from Jalalaty that there were issues with the investment from December 2006, but first learned in March 2007 that Jalalaty had, in fact, used Kinch’s money. The appellant introduced Jalalaty to Mr Wheeler to assist him to recover his funds and also sought, via the NSWCC’s AUSTRAC database, confirmation that the funds had gone overseas. He did not concede that there was anything improper about doing this.

The appellant said that Mr Wheeler was regarded as a community source. File notes from meetings that the appellant had with Mr Wheeler in July and August 2003 were tendered. They included comments that Mr Wheeler was extensively recorded on the COPS system in relation to his standover activities.

The appellant gave evidence that from this stage and throughout 2007, Jalalaty began referring to the possibility of entering into an illicit scheme. He said that at some point, Jalalaty said that he had a plan that “B52 [Kinch] could just put something in one of the shipments and it will all be fixed up”. The appellant said that he responded, “Look just make the trading work”. He said that “That theme or conversation was repeated on most occasions” that he saw Jalalaty. He said that he asked Jalalaty, on a subsequent occasion, whether it was based on anything Jalalaty had been told and that Jalalaty “made a strange comment, … ‘No, but that’s the really clever bit. He never says anything. He just says “I will be in touch”’”.

The expression, “the unlawful scenario”, developed into a shorthand term for the appellant’s understanding of what Jalalaty would hint at from time to time.

The appellant stated that in relation to some of these conversations, he adopted what he described as the “reflective approach”. He did not argue directly with Jalalaty but tried to use themes arising in conversations to move the discussion along. He said that this approach could include repeating particular phrases used by Jalalaty.

The appellant described his view of Jalalaty as mixed. On one hand, he had seen him as a competent and capable businessman, but on the other, he had seen “the odd” side of him, adopting Kinch’s expression “a Walter Mitty”.

In late May or early April 2007, the appellant had a phone call with Kinch. Kinch said that Jalalaty was telling people that he was involved in “transport”, meaning the transport of illegal products. Kinch expressed bemusement at this and concern that Jalalaty “might be a nutter”. The appellant expressed the view that Jalalaty was “harmless”.

The appellant was taken to the recording of his conversation with Jalalaty during their meeting of 15 September 2007, to which we have referred in pars [44]-[50] above. The appellant said that at that stage, his expectation that the rice was part of an illicit scheme was “zero”. This was because he had made clear to Kinch that there was to be no illegal activity, Jalalaty was never consistent on the subject and Kinch was unaware at that stage that Jalalaty had lost his investment.

The appellant gave evidence concerning that part of the conversation which related to Jalalaty, noting that it was unusual that a company called Elegant Hosiery would export rice (see par [44] above). He said that when he (the appellant) replied, “All sorts of companies do all sorts of stuff”, his “mind was trying to work out what the word ‘hosiery’ meant, and then my response is quite obvious”.

The appellant said that he had not previously heard that AQIS had a policy of inspecting goods at the port of loading. He said that when he described what Customs might do with the shipment, he was just describing the difference between Customs and AQIS, without going beyond publicly available information.

The appellant said that this was the first occasion that he had heard that Kinch was involved in the importation of rice. The appellant said that, as before, he was concerned that Jalalaty was communicating in an inappropriate way with Kinch, but was pleased that their joint business interests were moving forward at last.

The appellant said that apart from a specific concern that he had that Jalalaty would disclose information concerning the health of Kinch’s daughter, there was no need to circumscribe communications between Kinch and Jalalaty. He did, however, describe to Jalalaty the means of using the draft email system because Jalalaty had heard him discuss it and was “excited” about it.

In November 2007, the appellant and Kinch exchanged a number of emails. The appellant said that these related to their various possible business ventures.

The appellant gave evidence concerning the email message from Kinch of 4 November 2007, to which we have referred in par [69] above. The appellant said that in the email, Kinch’s expression of relief that they had not let Jalalaty loose with their “pension fund” communicated a general view to not put hope in Jalalaty, rather than a reference to any specific sum of money. The appellant also gave evidence regarding a subsequent email of 12 November, in which Kinch said, “I would appreciate it if you [the appellant] would keep an eye on her”. The appellant said that he understood that to be a “precautionary word here and there … to … make sure you don’t say anything about, you know, Jim and me or something to that effect”.

The appellant gave evidence concerning the meeting with Jalalaty of 23 November 2007, to which we have referred in pars [72]-[75] above. The appellant said that he understood Jalalaty’s reference to “sixty bags” to be a reference to a quantity of something unlawful. He did not know what Jalalaty meant which he referred to 300 kgs. The appellant, referring to his response, “right down the back hopefully”, said that he made “a somewhat ludicrous statement, that if there is something unlawful in the container then hopefully it’s right down the back”.

The appellant gave evidence that he was concerned that Jalalaty appeared to be involved in an unlawful scheme, but still allowed very little credibility to anything he said. He said that he did not wish to confront Jalalaty, consistent with his usual approach, and also wished to continue receiving financial support from him. The appellant also said that he did not ever consider that he was a recipient of profits from unlawful activity because he never considered that there was any unlawful activity.

In the conversation of 15 September 2007, Jalalaty expressed some calculations using a figure “$100,000 a kilo”. The appellant said that he thought that Jalalaty was just picking up the figure that the appellant had himself come up with during that conversation.

The appellant was asked about the meeting that he had with Jalalaty on 12 December 2007, to which we have referred in par [81] above. The appellant said that in this conversation, as with previous conversations, he was playing along with Jalalaty when he mentioned Kinch or illegal activities. He said that his explanation was the same as the explanation he gave regarding the 23 November conversation.

The appellant referred to that point in the conversation where Jalalaty said, “I am supposed to unload it myself. I don’t know what I’m looking for”. The appellant said that he took that to be a reference to it containing something illegal. However, within moments, Jalalaty was talking about an insurance claim relating to a roof on one of his properties. The appellant said that he just viewed this as more evidence that Jalalaty was not credible.

In telephone conversations recorded on 14 and 18 December 2007 between the appellant and Jalalaty, Jalalaty referred to hams and Christmas presents from Kinch. The appellant said that this was a reference to meat products, which Jalalaty had given him in the past and to presents of money from Kinch.

The appellant gave evidence of the conversation that he had with Jalalaty on 10 January 2008, which we have referred to in par [83] above. The appellant said that after Elegant Hosiery was mentioned, he tried to steer the conversation away from the vague but familiar topic of the unlawful scenario. He said that he understood the reference to a “live” one in the conversation to be a reference to an illegal shipment. However, he stated that he did not believe that Jalalaty was really going to import anything illegal. The appellant said that he did not recall what was going through his mind when he asked Jalalaty if he was following Kinch’s instructions about going to internet cafés.

The appellant was cross-examined about his finances at that time and he agreed that it did not make sense that his situation was “dire” if he had all of his sources of income.

The appellant was asked about the meeting he had with Jalalaty on 11 March 2008, to which we have referred in par [95] above. He said that the information that he gave to Jalalaty about Customs procedures was in response to his questions and did not go further than publicly available information. The appellant explained that, as before, he understood Jalalaty to be hinting that something illegal was to occur, but did not really believe him. He said that he tried to steer him back towards talking about legitimate business.

The appellant gave evidence about the conversation that he had had with Jalalaty on 1 April 2008, to which we have referred in par [99] above. He said that in this conversation, he adopted what he had previously described as the reflective approach, not confronting Jalalaty about nonsensical subjects or inferences of illegality.

The appellant said that he recalled the conversation of 9 April 2008, to which we have referred in par [103] above. He said that he thought that Jalalaty was talking about “the unlawful subject would I hear from customs or police or whoever”. He said that in response, “I screwed up my face and shrugged my shoulders in a gesture suggesting how the hell would I know which prompted him to say: You wouldn’t know”.

So far as the conversation on 30 April 2008 was concerned (see par [110] above), the appellant said that despite what he had said to Jalalaty, it was never his intention to ask Mr Whalebone about the container and indeed, he did not.

The appellant said that Jalalaty told him about what he described as a ransom note. He said that it was the first time that he had heard of such a document, stating, it was “all a bit weird”. In relation to the conversation on 13 May 2008 (see par [115] above), the appellant said that he “didn’t accept anything of these things [that Jalalaty had said were suggested by Kinch] as being genuine conversations he was having with Mr Kinch”. He said that he thought that Jalalaty was making the whole story up.

The appellant referred to the reference to “crystal” in the conversation he had with Jalalaty on 20 May 2008, to which we have referred in par [116] above. His explanation was that he was about to say, “‘Oh you mean like a stir fry’ and then I didn’t and instead I said ‘Oh, so, like, chemicals and things like crystal’”. He said that he was “trying to think of something that would look like rice”, saying that “for some bizarre reason, harking back to school days, potassium permanganate came to mind, which is Condies crystals”.

The appellant referred to his meeting with Jalalaty of 27 May 2008, to which we have referred in par [123] above. He said that he thought Jalalaty looked unwell. He said that Jalalaty removed his mobile phone battery and indicated to the appellant that this was significant. The appellant understood that this was related to a concern about listening devices. The appellant said that Jalalaty’s behaviour concerned him and he was not acting like his normal self. The appellant said that when he made the remark, “Definitely rare rare and not good”, about the prospect of Customs completely unloading the container, he was concerned about the prospect of further delay and the costs which would be incurred.

In relation to the reference to Steven Mercer in the conversation and his response to Jalalaty’s question about whether Mr Mercer could be lying, the appellant said that he just “made it up” and he had “no reason to think one way or the other about that”.

The appellant was referred to his conversation with Jalalaty of 29 May 2008 (see par [126] above). He said that he was still attempting to get Jalalaty to move forward and sell the rice. He said that he was growing increasingly concerned that the NSWCC might think that there was something suspicious in their relationship and sought to discourage Jalalaty from excessive communication.

The appellant said that he understood the reference to “kids” in Kinch’s email of 28 May 2008 (see par [126] above) to be a reference to the container. He said that he thought that the amount of attention that he was supposed to apply to a container of rice was disproportionate to its value, but was not so surprised because Jalalaty had been involved in such a protracted dispute over it. The appellant denied that he understood “kids” to be a reference to drugs in the container.

The appellant was asked about his answers to questions in the interview of 2 June 2008, in relation to the unlawful scenario. He said that what he said was true, to the best of his knowledge at the time. He admitted that he was not completely truthful in stating how much money he had received from Jalalaty, because he was convinced that the money was legitimately sourced and knew that if he had received funds from the conspirators, it would prejudice the officers against him. He conceded that this exchange was deliberately false.

The appellant said that he had not lied when he said that he had no knowledge of the first rice importation until after it happened. He said that he just did not recall at the time, but remembered when he heard the words “Elegant Hosiery”.

In his notice of appeal, the appellant relied on five grounds of appeal against his conviction. Ground 2 was abandoned at the commencement of the hearing of the appeal.

Ground 3, as formulated, was that the trial judge erred in refusing an application for a directed verdict in relation to Count 1 of the indictment. The ground was abandoned during the hearing, but was sought to be reformulated into an amended ground which asserted a misdirection of the elements of Count 1.

It is convenient to deal first with Ground 1, then with the proposed reformulated Ground 3 and thereafter with the remaining grounds.

This ground raises four separate issues. These issues will be dealt with separately.

Because of the structure of the appellant’s submissions, it is necessary to make some remarks concerning the way that the issue of the admissibility of the material complained of was dealt with at the trial. The first thing to be noted is that documents falling within the area the subject of this ground were separately considered and ruled upon by the trial judge. We have attached, as a Schedule to this judgment, a Schedule of the NSWCC documents which became Exhibit 37 in the proceedings.

It should be noted that at trial, senior counsel for the appellant took no objection to documents which post-dated 1 October 2005. No argument was addressed on Documents 58-74 in the Schedule, these documents having been admitted without objection. Thus, no error was made in respect of the admission of those documents.

Further, at trial, senior counsel for the appellant accepted that Documents 10, 11 and 15 were admitted as evidence of the notice that the appellant had of the criminal activities of Mr Kinch. Unsurprisingly, no objection was taken to Documents 1-4.

Document 16, confidential minutes of the meeting of the Gymea Team dated 17 March 2003, was admitted over objection. We have set out the functions of the Gymea Team as it emerged in the evidence in pars [164]-[166] above. The minutes show that Mr Standen attended a meeting of the Gymea Team on that day. We have set out the relevant part of the minutes in par [166] above. In relation to that document, the trial judge pointed out that it was admissible on the same basis as senior counsel for the appellant accepted that Documents 10, 11 and 15 were admissible.

Document 18 was admitted only in part. The part which was admitted showed that Kinch informed the Commission on 18 or 20 March 2003 of the method of email communication which was alleged to have been used during the course of the conspiracy and of the fact that “Fat Ron” was a Dutch principal.

So far as Document 22 was concerned, the trial judge admitted two emails of 5 May 2003 and 21 May 2003 from Mr Standen to Commissioner Bradley, the first of which stated that the issue of the money laundering charge against Kinch was “the stumbling block to our confiscation settlement”.

Document 23, which was established by extrinsic evidence to have been prepared by the appellant, was a report dated 23 May 2003, prepared at the same time as the emails to which we have referred in par [170] above. We have referred to the contents of the report in par [170].

Document 25 was the NSWCC’s informer file on Mr Kinch. The trial judge admitted certain individual documents in the file. His Honour admitted the payment record, which had no entries. He also admitted the informer registration details for Kinch. We have summarised the contents of this document in par [169] above. The trial judge also admitted what he described as “Yahoo emails” from Kinch to the appellant. The first two emails, sent in October 2004 and January 2005, involved Kinch attempting to obtain information from the appellant. The balance of the documents in this bundle were admitted either at the request of, or with the consent of, senior counsel for the appellant, with the exception of a document setting out Kinch’s criminal history, which the trial judge admitted.

Document 35 was an email from a Barry Sutherland. The portion of the email that was admitted stated, in effect, that as it had been a while since any update “from the Dutch” had been received, Standen and Mr Sutherland rang “them” yesterday and were told by “Dutch authorities” that “Fat Ron” was not the same person as a Yaron Abraham. The email said that “Hogan [Kinch] seems to concur” with the conclusion of the Dutch authorities.

Document 36 was a submission by the NSWCC to the Crown Advocate dated 28 November 2003, signed by the appellant. The submission concerned the prosecution of Kinch. It stated that Kinch had previously been a high quality informant and that because of safety concerns, his “assistance could not be recognised in the usual way” so the money laundering charge against him, described as “far from strong”, was withdrawn. It stated that Kinch had agreed to forfeit $1.3 million in assets. It also stated that Kinch claimed that he did not give an undertaking to plead guilty to the remaining drug charges.

The letter stated that Kinch had “provided a very detailed account of a group of Sydney-based business people who were responsible for laundering not less than $60 million in cash during 2002 and early 2003”. It stated that Kinch had agreed to assist in an investigation into this and that he had “informed the Commission that Dutch criminals had a further $1.5 million … which they wanted Mr Kinch to take to the … money launderers”.

The letter also referred to a controlled operation which occurred after written advice was given from the Commonwealth Director of Public Prosecutions (Cth DPP) that a payment of $300,000 was made by Kinch to the money launderers.

The letter was admitted on terms that it would not be said that there was any misrepresentation of the advice which had been given by the Cth DPP.

Document 43 was the consent order relating to the confiscation of assets, referred to in the letter of 28 November 2003.

Document 46A was the report of 23 December 2004, to which we referred in par [176] above. In admitting it, the primary judge expressly stated that he took into account the fact the defence had received late notice of the document.

It is not clear whether objection was taken to Documents 49 and 53. Document 49 was the email of 21 June 2005, to which we have referred in par [177] above. Document 53 was the email from Inspector Hennes to members of the Gymea Team, referred to in par [178] above.

Document 104A was a summary of telephone contact between the appellant and Mr Kinch. It recorded a very large number of calls between the appellant and Mr Kinch between 15 July 2003 and 15 February 2004. We have referred to the summary in par [174] above.

The trial judge, in addition to considering the documents, gave written reasons for his decision. In a judgment dated 26 May 2011 (R (Commonwealth) v Mark William Standen [2011] NSWSC 1044), he stated his conclusion in the following terms:

The appellant’s submissions on this ground, both oral and written, were unsatisfactory. They did not condescend to identify which actual documents, or what portion of the oral testimony given at the trial, was the subject of the ground.

This was in contrast to the approach taken at the trial, where documents presumably covered by the ground were the subject of argument and were considered individually by the trial judge.

In his written submissions, the appellant complained that the material the subject of this ground ought to have been excluded under s 137 of the Evidence Act 1995 (NSW). The material was described in the submissions as “information reports, and other NSWCC records, relating to Kinch; correspondence relating to representations made to the Director of Public Prosecutions, NSW, by the NSWCC; correspondence between the Director of Public Prosecutions, Commonwealth, and the NSWCC, regarding a controlled money laundering operation using Kinch; miscellaneous information and reports from other ‘informers’ relating to ‘the Dutch’, Kinch and other matters”.

The appellant acknowledged that at the trial, it was conceded that the material could possibly be relevant as showing Kinch’s knowledge of prohibited drugs and his criminal history, the appellant’s knowledge of drugs, the appellant’s non-compliance with NSWCC procedures regarding the handling of informers and the appellant receiving benefits from Kinch.

The appellant contended, incorrectly, that notwithstanding these matters, objection was taken at the trial to the whole of the material.

The appellant submitted that there were a number of important matters which demonstrated the prejudicial nature of the material. He submitted that they included the impact that the admission of such evidence would have upon the length of the trial, “especially given the jury’s complaints”, the nature and the incompleteness of the records, that the evidence was credibility evidence and not admissible, the probative value of the evidence, its capacity to be misused through tendency reasoning and unfairness in having to meet the allegations.

The appellant submitted that the danger of reliance on the evidence was demonstrated on three separate occasions. He submitted that this occurred in relation to the asserted inferences, first, that the appellant made representations in favour of Kinch which were more favourable than warranted, second, that the appellant misled the NSW DPP about the lawfulness of a controlled operation involving Kinch and third, that certain documents were located on a file assigned to a particular informant.

In support of the first matter, the appellant referred to a NSWCC Report of 21 March 2003, which said that Kinch had proved extremely reliable. He also pointed to the fact that in his remarks on sentence, the primary judge had found that he was not in a position to make a finding that the letters written to the NSW DPP in support of dropping the charges against Kinch were improper.

In relation to the second matter, the appellant pointed to the fact that the Cth DPP ultimately confirmed that the controlled operation would not be unlawful.

In relation to the third matter, the appellant pointed to the fact that, following a ruling in relation to the admission of some of the documents, the Crown informed the trial judge that the information relating to the money laundering and the controlled delivery were in fact found in Mr Standen’s office. He also noted that the Crown had informed the trial judge that documents which had been said not to be on the informer file were in fact on it.

The appellant also referred to other evidence that he claimed was highly prejudicial. This included evidence suggesting that the appellant leaked information to Kinch about the execution of a search warrant, suggesting misconduct in relation to the appellant’s work on “Operation Magazine”, and the assertion that the appellant “‘buried’ a 2004 ‘Information Report’ relating to Kinch”. He submitted that based on that evidence, the Crown had invited the jury to conclude that the appellant had engaged in corrupt conduct. He submitted that the evidence raised complex matters that the jury could not possibly understand. The appellant submitted that the totality of this evidence was likely to reinforce adverse views about the appellant in the mind of the jury.

The Crown submitted that the nature of the relationship between the appellant and Kinch was of central importance in the trial. It submitted that it was the prosecution case that the relationship became improper sometime after Kinch’s arrest in 2003 and the corrupt relationship formed the essential background to the formation of the conspiracy. The Crown noted that the appellant’s contention, by contrast, was that the relationship commenced as a legitimate handler/informer relationship and developed into a friendship, “animated by the joint pursuit of potential business opportunities”.

The Crown submitted that the NSWCC documents also provided evidence of the appellant’s knowledge of the criminal activities of Mr Kinch and his connection with the Haklander syndicate.

The Crown listed a number of inferences which it said could be drawn from the NSWCC material, including, but not limited to, those indicated by the trial judge in the passage of his judgment to which we have referred in par [306] above. One of the matters that the Crown pointed to was the intensity of the telephone communications prior to Kinch leaving Australia in February 2004 and the significant reduction of communications during the conspiracy period, indicating a deliberate change in the communication practice.

The Crown submitted that the evidence did not constitute tendency evidence, nor did its use involve tendency reasoning. It was submitted the evidence provided a relevant context to understand evidence of the appellant’s and Kinch’s participation in the illegal enterprise and contradicted any innocent explanation of their dealings and communications with one another.

The Crown submitted that the evidence was not unfairly prejudicial. It submitted that it did not result in an undue expenditure of time or lengthening of the trial. It was submitted that, to the extent complaint was made that the material was hearsay, the issue was not properly identified, as there was no reference to the precise use that was to be made of individual documents. To this may be added the fact that no objection on this ground was taken at the trial.

In relation to the contention that the admission of the records was unfairly prejudicial as the records were incomplete, the Crown submitted that any forensic point could be taken up in cross-examination or in submissions.

The Crown submitted that the documentation was relevant for non-credibility purposes and, to the extent that it suggested that the appellant was of bad character, it was not a proper basis to exclude the evidence.

The Crown made additional submissions concerning the representations made on behalf of Kinch to the NSW DPP by the NSWCC on 23 May and 28 November 2003, to which we have referred in pars [170] and [172] above. It submitted that the Crown case was that the May document understated Kinch’s criminality and overstated the value of his assistance. It was submitted that the fact that the trial judge did not make a positive finding that the representations were improper did not make the material inadmissible.

Senior counsel for the Crown gave an example of the relevance of the evidence by reference to Document 23, the report of 23 May 2003. He pointed out that it reported that Kinch had claimed that the Dutch syndicate had laundered $30 million to $40 million and $2 million was still owing. He noted that other evidence was that by 2004, Kinch was claiming that he no longer controlled the money. In those circumstances, senior counsel submitted that it could not be inferred that when $1 million was paid from Kinch to Jalalaty, it was sourced from some legitimate business.

In his written submissions, the appellant complained that the evidence should have been excluded under s 137 of the Evidence Act. It is implicit in that submission that the evidence was relevant. The appellant was correct in accepting that this was the case.

The issue in the proceedings was whether the activities carried out by the appellant, Kinch and Jalalaty were in furtherance of the conspiracy alleged against them or were conducted, at least so far as the appellant was concerned, as part of a genuine commercial arrangement to import legal products into this country. The nature of the relationship between the appellant and Kinch during the period leading up to the time of the alleged conspiracy was relevant to the consideration of this issue. The trial judge, in those circumstances, was correct in concluding that the evidence rendered it more probable that a fully corrupt relationship was in existence during the period alleged in the indictment.

As we indicated, the appellant acknowledged that it was conceded at the trial that the evidence was relevant to prove certain matters. The appellant did not contest the correctness of this concession.

However, in addition to the matters conceded by the appellant, the NSWCC evidence demonstrated that the appellant was involved in an entirely inappropriate relationship with Kinch, the nature of which was concealed from the NSWCC. The evidence of a large number of telephone calls made between the appellant and Kinch (Document 104A in the schedule), not disclosed to the NSWCC, the receipt of gifts from Kinch, including the $47,000, the failure to investigate the matters raised by Inspector Hennes, to which we have referred in pars [178]-[180], and the failure to disclose the information report of 23 December 2004, to which we have referred in par [181], demonstrate the impropriety of the relationship. Further, the evidence showed that this occurred at a time when the appellant was in a precarious financial position, had borrowed from an associate, not disclosing the borrowing to the Commission, and had urged that associate not to disclose the borrowing. This undisclosed financial position provided a motive for the appellant to enter into the arrangements the subject of the charge.

The appellant submitted that the NSWCC evidence was tendency evidence. However, in the trial, no reliance was placed on Pt 3.6 of the Evidence Act in support of the proposition that the evidence should not be admitted. It was correct not to place reliance on these provisions. The evidence, in our view, was admissible to establish the relationship between Kinch and the appellant prior to the period in question as, for the reasons we have given, it bore directly on the probability of the appellant entering into the conspiracy: Wilson v R [1970] HCA 32; 123 CLR 334 at 339; Harriman v The Queen [1989] HCA 50; 167 CLR 590 at 594 (although these cases predated the Evidence Act, the passages cited remain applicable); R v Cornwell [2003] NSWSC 97; 57 NSWLR 82 at [38].

It remains to be considered whether the judge erred in declining to reject the evidence under s 137 of the Evidence Act.

In dealing with s 137, it is important to bear in mind that what is required is the identification of the danger of unfair prejudice to the accused. Evidence is not prejudicial merely because it tends to establish the Crown case: Papakosmas v R [1999] HCA 37; 196 CLR 297 at [91] citing R v BD (1997) 94 A Crim R 131 at 139. As Gleeson CJ pointed out in Festa v The Queen [2001] HCA 72; 208 CLR 593 at [22], “prejudice does not arise simply from the tendency of the admissible evidence to inculpate the accused”. His Honour emphasised the need for unfair prejudice, stating (at [22]):

In the same case, at [51], McHugh J pointed out that evidence “is prejudicial only when the jury are likely to give the evidence more weight than it deserves or when the nature or content of the evidence may inflame the jury or divert the jurors from their task”.

In dealing with the NSWCC evidence as a whole, consistent with the appellant’s submissions, in our opinion, the evidence had a high probative value, demonstrating both an improper relationship with Kinch, concealed from the Commission, coupled with a motive to embark on the conspiracy. The evidence of the relationship casts doubt on the proposition that the subsequent relationship was innocent and lends support to the conclusion that the subsequent conspiracy was entered into.

As we indicated, the appellant submitted that the material would have reinforced adverse views about the appellant, stating that the evidence was likely to have “overwhelmed the jury”. In that context, the appellant referred to the decision of the High Court in Patel v R [2012] HCA 29; 247 CLR 531. In that case, the plurality held (at [112]-[113]) that there had been a miscarriage of justice, as following the narrowing of the Crown’s case, evidence which was highly prejudicial to the accused, much of which was irrelevant, was left to the jury. The miscarriage identified was that had the case been conducted on the narrower basis from the outset, irrelevant material would have been excluded and some of the material that remained relevant may have been excluded. In the present case, as we indicated, the evidence remained relevant throughout the trial and had significant probative value.

The appellant submitted that the evidence was unfairly prejudicial because of the impact that it would have had on the length of the trial. However, a review of the transcript does not demonstrate that the proceedings were significantly lengthened by the admission of the evidence.

The appellant also relied on what he described as “the nature of the records” and the fact that they were “incomplete”. However, the fact that there might have been other records which put what was tendered into context does not mean that the admitted material gave rise to a danger of unfair prejudice which outweighed its probative value. To the extent that such records were available, they could have been tendered at the trial. The appellant did not identify the material that was allegedly not available or why its absence could not have been dealt with in cross-examination. Further, the jury were told in the summing-up that they should take into account that the NSWCC records were not complete.

The appellant made specific submissions in relation to the trial judge allowing evidence of representations made by the appellant to the NSWODPP about Kinch to go to the jury. The appellant pointed to the report of 23 May 2003 to the DPP regarding Kinch, attached to a NSWCC letter. It was submitted that although the Crown asserted that this evidence was unduly favourable to the appellant, the primary judge ultimately included in his remarks on sentence that he was not in a position to make a finding that the letter was improper: R v Standen [2011] NSWSC 1422 (Remarks on Sentence) at [35]-[36]. The fact that this was the conclusion of the trial judge at the conclusion of the trial does not mean that he erred in admitting the evidence.

In relation to the admission of the letter of 28 November 2003 (Document 36, see pars [298]-[301] above), which the Crown alleged had misled the NSW DPP about the lawfulness of the controlled operation, the letter was admitted expressly on the basis that it contained no misrepresentation of the advice given by the Cth DPP.

The third specific complaint involved the identification of the location of certain documents following their admission (see par [316] above). The true position was drawn to the attention of the trial judge and it has not been suggested how the danger of unfair prejudice arose in those circumstances.

No other specific submissions were made in relation to the balance of the 11 documents the subject of the trial judge’s rulings.

Finally, any possible misuse of the material could have been corrected by directions to the jury. The appellant abandoned the ground of appeal relating to directions to the jury on this issue.

In these circumstances, Ground 1(i) has not been made out.

The appellant submitted that the evidence concerning the possession of acetone by Jalalaty was remote in time and in circumstance from what was described as the “Crown case theory”. He submitted that there was no direct evidence that he was in any way involved in the control of the acetone or in the decision to sell it. In these circumstances, he submitted that the evidence should not have been admitted as it had “little probative value but extremely high prejudicial value”.

Senior counsel for the appellant submitted that the purchase of acetone by Jalalaty could only be described as “a frolic of Jalalaty’s own”, rather than an act done in furtherance of the conspiracy. He submitted that in those circumstances, the admission of the evidence was a diversion and a highly prejudicial one, whatever it may have indicated about Jalalaty’s state of mind.

Senior counsel for the appellant submitted that care had to be taken not to allow the effect of the evidence relating to acetone to undermine the appellant’s credibility, particularly having regard to the lack of evidence involving him in the sale. He submitted that “The presence of the acetone supported the proposition that Jalalaty could have been obtaining the acetone for potential use to manufacture MDMA, and that allows one to infer that it was pseudoephedrine that was to come in”. However, he pointed to the fact that the evidence was that MDMA was not made from pseudoephedrine, in the sense that pseudoephedrine was not a precursor for MDMA. He submitted, referring to the Crown’s written submissions, that it was not enough to just point to some form of joint criminal enterprise coupled with a general intent to import illegal substances.

The Crown submitted that the evidence was relevant to establish the appellant’s awareness, first, that the subject matter of the conspiracy was a precursor and second, the true nature of the relationship between the appellant and his alleged co-conspirators.

The Crown submitted that no unfair prejudice had been identified and no objection was taken to its relevance. In that context, the Crown cited what was said by the trial judge in his reasons for refusing a directed verdict: R (Commonwealth) v Mark William Standen [2011] NSWSC 1046 (Standen Directed Verdict Judgment) at [19]-[20]:

The Crown also pointed to the evidence of Mr Stevenson, to which we have referred in par [214] above. The Crown also referred to an intercepted telephone call of 21 November 2007, in which Jalalaty stated that he had bought the acetone for $8,000 and was willing to sell it for $5,000, because, “I just want it out of there because if someone finds it there how would I explain myself?”.

The Crown submitted that the appellant was aware in September 2006 that Jalalaty was storing a large quantity of acetone on behalf of Kinch and was involved in communications as to what should be done with it. It was submitted that the “evidence was capable of supporting an inference that the subject matter of the importation was a precursor chemical and that this was known by the appellant, BJ [Jalalaty] and JK [Kinch]”.

In addition, the Crown submitted that the evidence was relevant to the true nature of the relationship between the alleged conspirators. It submitted that the appellant’s knowledge that Jalalaty stored acetone on behalf of Kinch, a person known by the appellant to have a criminal past, was relevant to the true nature of the conspiracy.

Senior counsel for the Crown stated that the point of the evidence was that Jalalaty asked the appellant what Kinch wanted done with the acetone. He pointed to the appellant’s evidence that it was all connected with a person named Doyle and that Jalalaty had bought the acetone by mistake thinking that the appellant had wanted him to do so (see pars [246]-[247] above). He described that evidence as extraordinary.

The evidence in relation to the acetone could not realistically be described as remote in time from the alleged conspiracy, as submitted by the appellant.

The acetone was stored at Jalalaty’s warehouse from at least 24 September 2006. This was apparent from Jalalaty’s email to the appellant of 24 September 2006 in which Jalalaty asked, “What does he want me to do with the drums. It is no problem to store them and keep them until they need them”.

We have referred above to the intercepted conversations of 21 November 2007 concerning the disposal of the acetone (see par [71]) and to the evidence of Mr Stevenson to the effect that Jalalaty told him that it could be used to manufacture ecstasy.

The evidence demonstrated that the appellant knew that Jalalaty was storing the acetone on behalf of someone else and that it could be stored until it was used.

In our opinion, it could be inferred from the evidence and the other intercepted conversations between the appellant and Jalalaty that the acetone was held on behalf of Kinch, to be used by someone in the manufacture of a prohibited drug. As we indicated, the appellant knew that it was stored “until they need them”. This evidence, as the trial judge pointed out, supports an inference that Jalalaty and the appellant were involved in an arrangement to import a substance to be used in the manufacture of a prohibited drug.

The appellant did not dispute the relevance of the evidence. However, he submitted that the position could be described as Jalalaty embarking on a frolic of his own and the evidence was a highly prejudicial diversion. This submission ignores the email from Jalalaty to the appellant asking what he wanted done with the drums.

The appellant’s reliance on the fact that, while acetone could be used in the manufacture of MDMA, pseudoephedrine was not a precursor for MDMA, does not seem to us to render the evidence highly prejudicial. The evidence tendered did support the inference that what was intended to be imported was something which could be used in the manufacture of a prohibited drug and that the appellant, Kinch and Jalalaty were involved. The fact that it was subsequently proved that pseudoephedrine was not used in the manufacture of MDMA may have lessened the effect of the inference which could be drawn, but that did not make the evidence unfairly prejudicial.

Although the Crown made some reference to what was described as the appellant’s implausible explanation for the presence of the acetone (see pars [246] and [247] above), that does not seem to us to be of relevance in dealing with the admissibility of the evidence tendered by the Crown. Nevertheless, for the reasons we have given, the evidence was properly admitted.

It follows that this ground has not been made out.

The appellant, in his written submissions, identified three items of evidence concerning MDMA:

The appellant submitted that “In light of the scientific evidence that pseudoephedrine is not a precursor for MDMA it was not open to the Crown to assert that MDMA was a relevant controlled drug for the purposes of Count 1”. He submitted that the Crown wrongly persisted in this submission in submissions to the jury, repeating that the Crown’s reasoning in these submissions was suggestive of a case based on joint criminal enterprise coupled with some general intent to import illegal substances.

The Crown submitted that the evidence in point (a), regarding the trafficking of MDMA by Kinch and the Dutch syndicate in 2003, was relevant to prove the appellant’s knowledge that Kinch was “a major international drug trafficker and money launderer”. It was pointed out that the appellant conceded the relevance of the evidence going to Kinch’s criminal history.

The Crown pointed out that the evidence in point (b), of Mr Heagney, was adduced by the appellant’s counsel.

In regard to point (c), the Crown also pointed to the fact that the appellant sought information from Kinch regarding the importation in the bath salts on his normal email and then used it as a pretext to call Mr Mercer from Customs asking whether it was “all quiet in the western front” (see par [114] above). It was submitted that “This was a calculated attempt by the appellant to determine whether the illegal consignment had been detected”. It was submitted that this evidence was directly relevant to prove the appellant’s involvement in the conspiracy.

The Crown submitted that no unfair prejudice had been identified by the appellant.

This ground can be dealt with shortly.

The first item of evidence complained of was relevant, at the very least, to show the involvement of Kinch in a drug importation in 2003. The evidence identified (Exhibit 37) comprised the whole of the schedule annexed to the judgment. We have already indicated why the trial judge was correct in admitting that material.

The second item of evidence was adduced by the appellant’s counsel in cross-examination. In these circumstances, the evidence could not be said to be unfairly prejudicial. We have dealt with the acetone issue otherwise in dealing with Ground 1(ii).

The relevance of the third issue was that, on the Crown case, it provided a pretext for the appellant calling Mr Mercer from Customs. It is clear that it did provide the pretext for the call to Mr Mercer which took place on 12 May 2008 (see par [114] above). As the Crown pointed out, in that call, the appellant asked Mr Mercer whether it was “all quiet in the western front”. The call took place at a time when the second consignment had arrived in Sydney.

It was open to the jury to infer that the call made by the appellant to Mr Mercer was made in order to ascertain whether the illegal substance in the shipment had been detected and the statement that a drug from China was hidden in bath salts provided a pretext for that call. Thus, the evidence strongly points to the involvement of the appellant in the conspiracy. There seems to be no unfair prejudice in its admission.

The material was also relevant to Count 3. It provided evidence of conduct which a jury could infer was an act in furtherance of the conspiracy to avoid prosecution for the importation of an illegal substance.

As the Crown submitted, no unfair prejudice was identified. The evidence was prejudicial only by reason of its probative value. As we have indicated, that is not a basis for the application of s 137 of the Evidence Act.

The appellant was critical of the use made of this evidence by the Crown and the Crown’s submissions to the jury. However, these matters are not the subject of a ground of appeal.

It follows that this ground is not made out.

The evidence complained of is evidence that the appellant did not tell RAMS about his loan from Mr Newton and he requested Mr Newton not to tell the NSWCC about that same loan.

The trial judge gave the following reasons for admitting the evidence in R (Commonwealth) v Mark William Standen [2011] NSWSC 1043:

The appellant submitted that although it was open to the Crown to lead evidence of motive, in order to indicate the appellant’s financial position, evidence of lies was unnecessary to achieve that end. He submitted that the admission of evidence of “irrelevant ‘lies’ … caused irretrievable prejudice to his case”, particularly in circumstances where his credibility was critical to his defence.

The Crown pointed to the fact that “NSWCC employees were required periodically to complete financial declarations disclosing assets and liabilities”. It was submitted that the reasoning of the trial judge in admitting the evidence was correct.

The Crown submitted that the evidence was relevant to challenge the appellant’s evidence that Jalalaty “made or promised payments to the appellant out of a ‘moral obligation’” arising out of “unfulfilled promises to the appellant”. The Crown submitted that the evidence showed that the appellant was prepared to engage in “dishonest financial conduct” in the expectation of a windfall, which “was directly relevant to proof of his participation in the illegal enterprise”.

At the hearing, senior counsel for the Crown submitted that the concealment of the appellant’s financial position was important, because if it was exposed, it would have led to an investigation and the proposal the subject of the conspiracy would have fallen apart.

Senior counsel also submitted that the nature of the relationship between the appellant and Kinch was of central importance at the trial. It submitted it was the prosecution case that the relationship became improper sometime after Kinch’s arrest in 2003 and the corrupt relationship formed the essential background to the formation of the conspiracy. The Crown noted that the appellant’s contention by contrast was that the relationship concerned a legitimate handler/informer relationship and developed into a friendship emanated by the joint pursuit of business opportunities.

The evidence in question was not only relevant to the appellant’s financial position. The fact that the appellant was prepared to mislead the NSWCC and encourage Mr Newton to do so, coupled with the concealment of his dialogue with Kinch, was evidence from which the jury could infer a corrupt relationship, which made it more likely that the appellant would enter into the conspiracy alleged by the Crown. The non-disclosure was important because any disclosure of the actual position may well have led to an investigation, which would have uncovered the appellant’s improper relationship with Kinch.

The evidence had some prejudicial effect, as the trial judge pointed out in the passage from his judgment to which we have referred in par [379] above. However, having regard to the nature of the evidence, the danger of any unfair prejudice did not outweigh the probative value of the evidence.

It follows that this ground of appeal has not been made out.

In considering this ground, it is necessary to have regard to the provisions of s 11.5 and s 307.11(1) of the Criminal Code 1995 (Cth).

Section 11.5, so far as relevant, provides as follows:

Ground 3, as originally formulated, was that the trial judge erred in refusing an application for a directed verdict of acquittal on Count 1. It was submitted that the judge fell into error in two respects. First, the trial judge misdirected himself as to the elements of Count 1, in that he failed to consider the fact that at least two persons said to be party to the conspiracy had to have held the requisite belief in s 307.11(1) of the Criminal Code during the course of the agreement and at the same time. The second basis was that there was no evidence on which the jury could reach the conclusion that they did.

In rejecting the application for a directed verdict, the trial judge made the following remarks in the Standen Directed Verdict Judgment:

As we have indicated, the challenge to the judgment declining to direct a verdict on Count 1 was abandoned and leave was sought to reformulate Ground 3. Directions were given for written submissions both on the grant of leave and the substantive ground.

The Ground 3, as re-formulated, was in the following terms:

The trial judge gave the following written directions in relation to Count 1:

In his summing-up, his Honour made the following remarks on the elements of the offence:

In submissions concerning the formulation of the written directions, the appellant’s counsel suggested the following written direction in respect of Count 1:

It did not appear to be in dispute that a direction in terms of par 3(iii) of the appellant’s draft was effectively dealt with by par 5 of the written directions. Rather, the debate centred on the incorporation of par 3(iv) of the appellant’s proposed direction into the trial judge’s direction, as distinct from the matters in pars 2 and 3 of the trial judge’s directions, which were dealt with separately.

Importantly, there was no submission that the direction should specifically provide that the appellant and another party to the agreement held the requisite belief at the same time.

The appellant submitted that the proposed direction given by the trial judge on the elements of the first count was challenged at the trial. He submitted that it was an essential element of the offence charged that at least two parties to the conspiracy, including the appellant, held the belief, during the currency of the agreement, that “any other person” intended to use the imported precursor to manufacture a border controlled drug. He submitted that the belief had to be held by the parties at the same time during the currency of the conspiracy and a mere expectation that such manufacture might occur was not enough.

The appellant submitted that the requirement was particularly relevant in the present case because his case was that he never believed pseudoephedrine would be imported, stating that this was the basis of the unlawful scenario.

The appellant submitted that notwithstanding the position taken by counsel at the trial, the trial judge declined to direct on this issue. He submitted that a proper direction was essential and no prejudice was suffered by the Crown by reason of this matter being raised towards the conclusion of the appeal. In those circumstances, he submitted that leave to amend the ground should be given.

In dealing with the substantive issue, the appellant sought to rely on his submissions in relation to the original formulation of Ground 3. While he was entitled to do so, it followed from the abandonment of the original ground that it was not ultimately in issue that there was evidence to go to the jury on Count 1. The amended ground focused entirely on the adequacy of the direction to the jury on this issue.

In his written submissions on the original Ground 3, the appellant submitted that the elements of the offence were correctly set out by Hodgson JA in Standen v Commonwealth Director of Public Prosecutions [2011] NSWCCA 187; 254 FLR 467 (Standen Abuse of Process Judgment) at [21]. He submitted that “s 307.11 is not an offence that temporally distinguishes between the act of importation and the intention or belief on the part of the importer to manufacture, or have someone else manufacture, a border controlled drug”. He submitted that the substantive offence did not merely relate to importation, but required importation with an intention that the importer would manufacture the goods into a border controlled drug or a belief that someone else would do so. He submitted that this intention must exist at the time of entry into the agreement.

Senior counsel for the appellant submitted that the relevant question was whether, at a time during the currency of the conspiracy, the relevant elements of the agreement, plus intention, and the elements of s 307.11, co-existed.

The appellant said that, to the extent necessary, leave to raise the ground should be granted under r 4 of the Criminal Appeal Rules (NSW). He submitted that the necessary requirements for the offence were not submitted to the jury in order to enable them to consider the facts in the proper legal context. He submitted that the only direct evidence capable of supporting the conclusion that the substance to be imported was a border controlled precursor was the evidence of the conversation of 21 May 2008. He submitted that the other matters referred to by the primary judge were equally applicable to other substances which were not border controlled precursors.

The appellant submitted, without elaboration, that the absence of the direction impacted on: “the commencement date, extent and nature of the conspiracy alleged”; “whether the Crown ought have been allowed to allege an ‘over-arching’ conspiracy”; and “whether what transpired between Jalalaty and the applicant/appellant on 21 May, 2008 was direct proof of the … conspiracy”.

The appellant also submitted that the absence of the direction impacted on “specific directions dealing with the evidence of the applicant/appellant in relation to the conversation on 21 May” and whether the appellant and either of the other conspirators had the requisite further intention concerning the manufacture of a border controlled drug at the same time.

The Crown pointed out that the appellant required leave to bring the amended ground of appeal by virtue of r 23C of the Criminal Appeal Rules. It also contended that leave under r 4 was required.

The Crown contended that it had never disputed the proposition that mutuality was required for an agreement to constitute a conspiracy. The Crown also accepted that the parties to the conspiracy had to have, at the same time, knowledge or belief of the facts that made the conduct the subject of the agreement an offence.

The Crown submitted that no direction the subject of this ground of appeal was sought at the trial. It submitted that the debate at the trial centred on whether what became Element 3 in the written directions should stand alone or be expressed as a matter that the parties intended to occur pursuant to the agreement, the appellant contending for the latter position. The Crown submitted that the debate was not concerned with any requirement of temporal connection. It was submitted that a direction that it was necessary to prove an intention to use any part of the substance to manufacture a controlled drug would have been incorrect. It was further submitted that if a direction as to temporal connection was considered to be necessary, it would have been asked for.

The Crown also submitted that the factual matrix was important. The Crown relied on the 21 May 2008 conversation and submitted that any inference which could be drawn as to the appellant’s state of mind would apply equally to Jalalaty. It was also pointed out that the appellant, in his evidence, “did not suggest that some elements of the offence existed at one time and others at a different time”.

The Crown submitted that the trial judge’s direction made it clear that the mental state to be proved was one of belief of the intention of another person to use the pseudoephedrine in the manufacture of a controlled drug.

In these circumstances, the Crown submitted that r 4 applied and leave should be refused. In submissions on the original Ground 3, senior counsel for the Crown submitted that looking at the enterprise globally, Kinch was making the decisions and, to the extent that the appellant had the requisite state of mind, it could be inferred that Kinch had the same state of mind.

Although ultimately there may not have been significant disagreement between the parties as to the elements of the offence the subject of Count 1, it is convenient to restate the elements having regard to the issues raised by this ground.

In The Queen v LK; The Queen v RK [2010] HCA 17; 241 CLR 177 (LK) the plurality stated the elements of the offence of conspiracy under the Code in the following terms:

The reference to “that offence” in the second sentence of that passage, in the context of the present case, is a reference to the offence under s 307.11 of the Criminal Code. It follows that for the crime of conspiracy to be made out, the prosecution will be required to prove an agreement between the accused and one or more parties to commit the offence prescribed by s 307.11. In LK, the plurality summarised the position (at [141]):

In Agius v R; Abibadra v R; Jandagi v R; Zerafa v R [2011] NSWCCA 119; 80 NSWLR 486, Johnson J, with whom Hall J and Tobias AJA agreed, stated, at [62], that “the offence of conspiracy depends upon the existence of, or participation in an agreement, and not the precise timing of its formation”. An appeal to the High Court was dismissed: Agius v The Queen [2013] HCA 27; 248 CLR 601. In that case, the offence in question was an offence under s 135.4 of the Criminal Code, which, relevantly, is in the same form as s 11.5 (although confined to conspiracy to commit a particular offence, namely, to defraud the Commonwealth). In dismissing the appeal, the plurality of the High Court rejected the argument that the Court of Criminal Appeal erred in holding that the physical element of the offence under s 134.4(5) (the equivalent of s 11.5(1)) was a state of affairs under s 4.1 of the Criminal Code. The plurality expressed their agreement with the Court of Criminal Appeal in the following terms (at [42]-[44]):

It follows that it was not necessary for the Crown to prove the precise date at which the appellant and one other party entered into the agreement. What was necessary for the Crown to prove was that the appellant and at least one other person said to be a party to the conspiracy were participants in an agreement to commit the offence contained in s 307.11 of the Criminal Code in the period the subject of the indictment.

Both the appellant and the Crown agreed that Hodgson JA correctly set out the elements of the offence in the present case in the Standen Abuse of Process Judgment (Adams and Hall JJ agreeing). His Honour’s formulation was as follows (at [21]):

We respectfully agree with this formulation, except we would prefer to state the physical element of the offence as participating in, or being a party to, an agreement, rather than being the entry into it. Further, the other person, in the present case, could be either Kinch or Jalalaty.

It follows that, contrary to the directions proposed by the appellant’s counsel at trial, it was neither necessary nor correct to state a requirement of proof that the appellant and at least one other party intended, pursuant to the agreement, for another party to use any of the substance to manufacture a controlled drug. The necessary element in the present case was that the appellant and one other party believed that another party intended to use any of the substance to manufacture a controlled drug. The trial judge’s direction in this regard was correct.

It is correct, as the appellant submitted, that it was necessary for the parties to the conspiracy to hold the belief required by s 307.11(1)(b)(i) during the course of the conspiracy and simultaneously for at least part of that time. The Crown did not dispute this. The question raised by this ground was whether the direction of the trial judge adequately dealt with this matter.

In our opinion, it did do so. Paragraph 3 of the trial judge’s written directions emphasised the need for the appellant and one other party to the agreement to have the requisite belief. In his elaboration of this element of the offence in the summing up, the trial judge made it clear that at least one other person who was a party to the agreement must have intended that a substance would be imported, that it would be pseudoephedrine and must have held the belief specified in par 3 of his written directions on this ground. The trial judge emphasised this on three occasions.

It is correct that the judge did not state that the appellant and one other party to the agreement had to hold the belief at the same time during the currency of the agreement. However, the direction must be considered in context. It was not suggested at the trial that, during the course of the alleged conspiracy, the appellant and the other party to the conspiracy may have held the requisite belief, but not at the same time. The case for the appellant was that he did not believe that a prohibited substance was imported and he was not a party to any such agreement. It seems to us that, in these circumstances, the direction adequately explained the elements of the offence to the jury.

Further, in our opinion, r 4 applies in the present case. First, having regard to the manner in which the case was conducted at trial, it was entirely explicable why such a direction was not sought. There is no reason why the appellant should not be bound by that decision.

Second, and more importantly, no injustice was occasioned by the absence of such a direction. In this context, it must be remembered that the appellant was found guilty of Counts 2 and 3. This meant that the jury was satisfied beyond reasonable doubt that the appellant knowingly took part in the importation of 300kgs of pseudoephedrine (Count 2) and that he agreed with Jalalaty and/or Kinch to use his knowledge and information to avoid proceedings being instituted or successfully prosecuted with respect to the offence of importing a substance in contravention of Commonwealth law (Count 3). The relevant substance was pseudoephedrine.

It follows that the findings of the jury demonstrate, in effect, that the appellant, Jalalaty and Kinch were involved in the importation of pseudoephedrine. It was in that context that the conversation between the appellant and Jalalaty of 15 September 2007, to which we have referred in pars [44]-[50] above, took place. The reference to “what they buy and what they sell it for” (par [49]) demonstrates a common belief held by the appellant and Jalalaty that a third party would make use of the pseudoephedrine. The conversations of 21 May 2008, 25 October 2007 and 23 November 2007, referred to by the trial judge in his judgment on the application for directed verdict, indicated a similar common belief. We have set out the details of these conversations above. In the conversation of 23 November 2007 (see par [75] above), Jalalaty indicated that the “Portuguese Mate” would take the products and give back the empty bags. In the conversation of 21 May 2008 (see par [115] above), Jalalaty said to the appellant “it’s not a finished product. … they’re making something whatever we don’t know”. These conversations indicate a common belief that the substance would be used by a third party to manufacture an illegal drug.

That material demonstrates that there was no basis on which a jury could entertain the possibility that, although they were satisfied of the agreement to import the pseudoephedrine and that the appellant and one or more of the alleged co-conspirators believed that the substance would be used by another party to manufacture a controlled drug, that belief was not held by the appellant and a co-conspirator at the same time. In these circumstances, r 4 applies and leave to raise this ground should be refused.

The application to have the jury discharged on that day was made by the appellant following the Court’s receipt, the previous day, of a lengthy note from the jury setting out their “extreme concerns” as to the length of the trial and the impact it was having on their lives. The trial had commenced on 14 March 2011. The note was provided on 22 June 2011 which, as observed by the jury, was during the 15th week since the commencement of the trial.

The note was in the following terms (MFI 35):

The trial judge refused the application: R (Commonwealth) v Mark William Standen [2011] NSWSC 1047.

The appellant contends that the refusal occasioned the risk of a substantial miscarriage of justice, relying on the principles stated by the High Court in Maric v R (1978) 20 ALR 513. As noted by Gibbs J in that case, at 520, if an accused person is convicted following the refusal of a discharge application, the appeal is not against the exercise of the discretion to discharge the jury but against the conviction. Ultimately, the question is whether a miscarriage of justice has occurred.

The appellant submitted that “the first error” was the failure to empanel additional jurors at the outset of the trial, as allowed under s 19(2) of the Jury Act 1977 (NSW). The power to do so is conditioned upon the Court being satisfied that the duration of the trial is likely to be more than 3 months. When the discharge application was made, the trial judge recorded his recollection that he had consulted that provision before empanelling the jury and had concluded that he could not exercise that power, as he had been told that the trial would take “less time”, at one point being given an estimate of 6 weeks. The trial judge had been given “very conflicting estimates”, the longest of which was 3 months. The Crown did not think that the trial would run that long, suggesting an estimate of 7 or 8 weeks. On the Friday before the Monday on which the trial began, his Honour recorded his anticipation that “if the estimates are accurate” the trial might be approaching a climax towards the Easter and Anzac Day holiday period, which was to be 6 weeks from the day the jury was empanelled.

The jury was in fact reduced to 11 members shortly after the refusal of the discharge application but, contrary to the appellant’s submission, this could not have been avoided by empaneling additional jurors from the outset. The trial judge was at no point satisfied that the duration of the trial was likely to be more than 3 months. Accordingly, the power to empanel additional jurors was not enlivened. The fact that additional jurors were not empaneled must be put aside.

Separately, the appellant submitted that the concerns expressed by the jurors in MFI 35 and other notes that they provided during the trial invoked the principle stated by Basten JA in his Honour’s dissenting judgment in Cesan v DPP (Cth); Mas Rivadavia v DPP (Cth) [2007] NSWCCA 273; (2007) 230 FLR 185 (subsequently upheld by the High Court). That was a case in which evidence established that the trial judge had slept through part of the trial (and so could not have been exercising his function of supervising the jury during those periods). Basten JA said, at [71], “a trial conducted otherwise but in accordance with the essential imperatives of a trial by jury will not be a lawful trial”.

As submitted on behalf of the Crown, the attempt to invoke that principle in the present case was misconceived. The jury’s concerns did not point inexorably to any incapacity to discharge their function as jurors. The trial judge was best placed to assess the fairness of continuing the trial, having regard to the concerns they had raised. This Court should allow “much leeway” to the trial judge to evaluate such matters: Crofts v R (1996) 186 CLR 427 at 440.9. In our view, the suggestion that a frustrated jury is one that is not capable of meeting the essential imperatives of a trial by jury must be rejected.

For the reasons stated by the trial judge in his judgment, we are not persuaded that there was any miscarriage of justice. There was much in the jury’s communications during the trial to indicate their understanding of the importance of a fair trial for the appellant. There is no basis for concluding that any member of the jury was likely to allow his or her frustrations with the course of the trial to affect impartial judgment. As found by the trial judge, the note primarily recorded frustration with the fact that the original estimate had obviously blown out but no revised estimate had been provided.

Ground 4 has not been made out.

The appellant submitted that in summing up, the trial judge failed to deal separately with the elements of the offence in issue, in that, where instructing the jury of those elements, the judge included comments prejudicial to the appellant’s case. The appellant submitted that this occurred on at least ten separate occasions, giving ten examples. It is unnecessary to set them all out. In general terms, they refer to statements by the trial judge to the effect that, the Crown said ‘it has proved this element of this offence’ or the Crown said ‘there was evidence of a particular matter’. A particular example relied upon was what was said by the trial judge on p 29 of the summing-up:

The appellant said that it was unbalanced to simply express what the Crown had asserted without reminding the jury that the matter was in issue. He said that it was particularly relevant that the remarks were made on the first day of the summing-up and the summing-up of the defence case did not occur until five days later (which included a weekend).

The appellant also submitted that the prejudice occasioned by this imbalance was compounded in the summing up. He submitted that the trial judge summed-up the Crown’s case without reference to the appellant’s case. By contrast, it was submitted that in summing-up the defence case, the trial judge referred to contrary submissions of the Crown. The appellant said that an application to discharge the jury on this basis was refused.

The appellant submitted that the problem was aggravated by the trial judge referring to the appellant’s case as “arguments” for the accused. It was submitted that he should have at least referred to “submissions”, stating that the expression “arguments” had “pejorative connotations”.

The appellant accepted that it was necessary to put some matters raised by the Crown to the jury in order to give context to the trial judge’s summing-up. However, he submitted that despite the application to discharge the jury, the judge did not indicate that that was what he was doing, but rather, his Honour “continued to interweave his summing up of the defence submissions with his own comments and references to the Crown submissions”. He submitted that as a consequence, the summing-up was not fair, balanced and impartial and the issues in the trial were not clearly identified. He submitted that the appellant “suffered the loss of a real chance of acquittal”.

The Crown submitted that to the extent that a reading of the summing-up suggested that the Crown case was strong, that was “no more than a reflection of the reality”. It was submitted that it was appropriate for the trial judge to direct the jury as to the constituent elements of each offence and in that context, direct the jury as to how the Crown sought to prove that element. The Crown contended that the judge was entitled to comment on the evidence, having already made it clear that the finding of facts was entirely the province of the jury.

The Crown referred to the complaint, which we have set out in par [440] above. It was submitted that the words complained of did not suggest any view on the part of the trial judge as to whether the Crown had proved the matters relied upon.

In relation to the other matters complained of, the Crown submitted that the trial judge made it plain on various occasions that what he was referring to was the Crown case. The Crown submitted that there was no material difference between the words “submission” and “argument”. It was submitted that the other matters complained of did no more than put the defence case into context. It was submitted that the trial judge had spent a considerable amount of time dealing with the defence’s submissions, compared to the time dealing with those made by the Crown.

There was no issue between the parties that the summing-up was required to be fair, balanced and impartial. As the Crown submitted, the relevant principles were set out by Adams and Fullerton JJ in Abdel-Hady (“SA”) v R [2011] NSWCCA 196 in the following terms (at [134]-[136]):

Consistently with what was said in R v Courtney-Smith (1990) 48 A Crim R 49, we have read the whole of the judge’s charge to the jury. For the reasons which follow, we are unable to accept that the summing-up was unbalanced or unfair.

At the outset of his summing-up, the trial judge informed the jury that they were the judges of fact and it was up to them to determine what weight to give to the parts of the evidence that they accepted and the inferences to be drawn. It was emphasised that addresses by counsel contained arguments and submissions which were not in evidence.

In dealing with his own function, the trial judge emphasised that he had nothing to do with determining the facts. He stated that if he happened to express a view on some matters of fact, the jury was not only entitled to disregard that view, but must do so, unless it coincided with the jury’s own independent assessment of the facts. He stated that although he was not prohibited from expressing a view on the facts, if he did so, the jury was free to disregard that view and should, if it did not coincide with their own view. This statement is consistent with authority: R v Zorad (1990) 19 NSWLR 91 at 104-105.

Prior to dealing with the Crown case, the trial judge emphasised that the evidence given by the appellant concerning his conversations with Jalalaty, particularly the fact that he took what was described as a reflective approach, had to be taken into account. He also pointed out that there was a fairly large number of “indistincts” in the transcript, which might be important. At that point of his summing-up, he informed the jury they may have to take into account a more general explanation of the conduct of the appellant, Kinch and Jalalaty. He posed a question of whether it was reasonably possible that the appellant was not a party to the agreement, directing that if there was any other reasonably possible explanation of the circumstantial evidence, the jury should find the appellant not guilty. The case for the appellant, in general terms, was thus drawn to the jury’s attention fairly early in the summing-up.

The trial judge pointed out that he had been asked by counsel not to go into the evidence in detail in the summing-up. However, he said he would refer to a little of it. Thereafter, the trial judge gave a chronology of the evidence, without referring to any of the inferences sought to be drawn from it by the Crown.

The trial judge then referred to the evidence of the appellant, emphasising that he was only referring to a small part of it. Although the trial judge pointed out that the Crown took issue with what was said by the appellant about Kinch as an informer, he described most of the evidence without comment. However, after dealing with the unlawful scenario, he stated that the Crown submitted that the statements by the appellant concerning this scenario “were quite unavailing attempts by the accused to explain clearly incriminating remarks made by him and clearly incriminating remarks made to him by Jalalaty”.

The trial judge dealt with the Crown’s address relatively shortly, having regard to the overall length of the summing-up. On the third day of his address, he dealt with the submissions for the appellant. He emphasised that he would not refer to all of the arguments raised by the appellant. He also said that the jury should not take it that when he repeated an argument, he was giving it any personal endorsement.

Early in dealing with the address by counsel for the appellant, the trial judge emphasised that counsel for the appellant submitted that there was no direct evidence that the appellant knew what was being imported.

Thereafter, the trial judge adopted the course of referring to what was said by counsel for the appellant, by reference to what had been said by the Crown on the particular issue. His Honour adopted this course until an adjournment. At that stage, senior counsel for the appellant applied for a discharge of the jury on the basis the summing-up of his address was constantly interspersed with reference to the Crown submissions. The application was rejected.

The summing-up thereafter continued. Although the judge, in this portion of the summing-up, made reference to the Crown case from time to time, particularly in relation to the evidence relating to the acetone, he did so to a lesser extent than in the period before the adjournment.

In our opinion, considered as a whole, the summing-up was balanced and fair to the appellant. The judge emphasised that the jury were the judges of fact, that they should disregard his comments on the facts if they did not agree with them and that any comments he made on the Crown’s or the appellant’s submissions should not be taken as an endorsement of them.

The comments early in the summing-up to the effect that the Crown said that it had proved an element of the offence, merely stated what was self-evidently the position following the Crown address, namely, that it claimed to have proved a particular element. There was nothing unfair in making that comment, particularly when the trial judge subsequently emphasised that he was not giving any argument his endorsement.

An example given by the appellant highlighted the difficulty with this submission. It was submitted that the statement by the trial judge, to which we have referred in par [439], was unbalanced and unfair. However, that statement merely set out what the Crown had to prove if the appellant was to be convicted.

Another particular direction said to be unbalanced or unfair was the comment of the trial judge to the following effect:

That comment was introductory to a direction as to the manner the jury could use circumstantial evidence. At the conclusion of this portion of the summing-up, the trial judge emphasised that if there was any reasonably possible explanation of this circumstantial evidence, other than that contended for by the Crown, the jury must find the appellant not guilty. In that context, the remarks complained of were not unbalanced or unfair.

The other of the 10 separate occasions in respect of which a similar complaint was made fall into the same category as that referred to in par [439]. For the same reasons that we have given in relation to the portion of the summing-up referred to in that paragraph, we do not consider the remarks, taken alone or together, rendered the summing-up unbalanced or unfair.

Nor do we think that reference to the Crown case in dealing with the address of counsel for the appellant rendered the summing-up unbalanced or unfair. In our opinion, it was necessary, at the conclusion of what was a very lengthy trial, to put the address of the appellant in context. To the extent that the submissions made by senior counsel for the appellant dealt with specific matters raised by the Crown, it was appropriate for the trial judge to refer to what was said by the Crown in order to enable the jury to be appraised of the particular factual matters which had to be considered.

Finally, contrary to the submission of the appellant, we are unable to agree that the use of the word “argument” carried a pejorative overtone compared to the word submission and thus, contributed to rendering the summing-up unbalanced and unfair.

It follows that this ground of appeal has not been made out.

The appellant sought leave to appeal against his sentence on a single ground which inaptly combined both patent and latent error:

The appellant gave evidence for 25 days during the trial but did not give evidence in the sentence proceedings. In addition to the evidence adduced at trial, his Honour had available to him the following evidence on sentence:

As a result of the jury verdict, his Honour determined that the jury must have accepted the following Crown case:

In the Remarks on Sentence, his Honour noted that apart from oral and documentary evidence, the Crown case consisted of evidence of communications, to which one or more of the named conspirators were parties. His Honour reviewed, in summary form, the factual background to the offending. This factual background, including a summary of the evidence presented at trial, has been set out in pars [14]-[284] above.

His Honour declined to summarise the defence case, other than to say that the appellant denied that he had been a party to any agreement to import pseudoephedrine, denied that he had knowingly taken part in any attempt by Jalalaty to obtain possession of pseudoephedrine and denied that he had been a party to any agreement to pervert the course of justice.

His Honour found that the appellant’s acceptance of payments from Jalalaty, transferred to Jalalaty from Kinch, totalling $47,000, between December 2005 and January and February 2006 made him irretrievably corruptly compromised, so far as Kinch was concerned.

There was an issue in the sentence proceedings as to when the offending began. His Honour resolved that issue as follows in the Remarks on Sentence:

His Honour’s conclusion was:

His Honour found that the appellant advised Jalalaty about what steps should be taken to lessen the risk of the criminal enterprise being detected and about what he should say by way of an innocent, false explanation of his conduct if he were questioned by law enforcement authorities. The appellant utilised his personal contacts to make inquiries of law enforcement authorities, e.g. the Customs officers. While not directly supervising Jalalaty, the appellant oversaw what he was doing and gave him advice. From time to time the appellant acted as an intermediary between Kinch and Jalalaty. Towards the end of May 2008 when Jalalaty, concerned by the delay in obtaining the container, was showing signs of wishing to withdraw from the criminal venture the appellant applied pressure to him to remain in it.

His Honour set out his findings as follows on this issue:

His Honour found that the appellant’s position was superior to that of Jalalaty. Jalalaty sought and accepted advice from the appellant and sought reassurance from him. Jalalaty had no access to the line of communication between Kinch and the appellant and the appellant and Kinch resisted an attempt by Jalalaty to gain access to that line of communication. On the other hand, the appellant had access to the line of communication between Kinch and Jalalaty. Kinch and the appellant kept some matters secret from Jalalaty.

Kinch and the appellant commiserated with each other about what they saw as the short comings of Jalalaty. They believed he was a confabulator and were cautious about believing what he said. In emails Kinch asked the appellant to “keep an eye on” Jalalaty. His Honour’s conclusion was:

His Honour found beyond reasonable doubt that the quantity of pseudoephedrine which was the subject of the conspiracy to import and supply offences, was 300 kilograms.

His Honour also set out a number of communications which took place between the time of delivery of the container to Jalalaty’s premises at Blacktown, i.e. when the importation could be said to have been completed, and the arrest of Jalalaty and the appellant on 2 June 2008.

His Honour set out the communications of 23 November 2007, in which the appellant and Jalalaty discussed the collection of “bags” by the “Portugese guy” (see pars [72]-[75] above), 21 May 2008, in which the appellant cautioned Jalalaty against the use of “helpers” (see par [116] above), 28 May 2008, in which Kinch emailed Jalalaty and the appellant, informing them that “the children” were home (see par [126] above), 29 May 2008, in which the conspirators discussed the disposal of bags and innocent explanations for the high level of contact between them (see par [126] above), 31 May 2008, in which Kinch emailed the appellant asking him to keep an eye on Jalalaty and emailed Jalalaty reporting the arrest of a member of the Haklander syndicate (see par [128] above), and 1 June 2008, in which Kinch asked the appellant to assist Jalalaty to go “treasure hunting” (see par [130] above).

His Honour set out his conclusion in relation to these communications in the Remarks on Sentence:

In the Remarks on Sentence, his Honour reviewed the appellant’s subjective case. No challenge has been made to any of these findings. The appellant was born in 1957. He was married in 1984. There were four children of the union, three adults and a daughter aged nearly 10 at the time of the sentence hearing. An important matter in his personal life was the long standing alcoholism of his wife, who had been admitted to hospital on a number of occasions as an involuntary patient. The youngest child at the time of sentence had been placed in foster care and was suffering from behavioural problems.

Because of his background and the fear of violence from other prisoners, he was held in a Special Purpose Prison. His cell was small and his exercise opportunities and ability to mix with other prisoners were extremely limited.

Dr Westmore expressed the opinion that the appellant’s family situation and the relationship with his wife “is more likely than not to have caused him to become distressed, maybe depressed at times, but I can’t find any direct relationship between that and the offending behaviour”. Dr Westmore noted that the appellant did not acknowledge any wrongdoing.

By reference to s16A(2) Crimes Act 1914 (Cth) and s21A of the Crimes (Sentencing Procedure) Act 1999 (NSW) his Honour took into account aggravating and mitigating features of the appellant’s offending. His Honour found there was no contrition. Although the appellant had not admitted guilt, his Honour found that there were good prospects of rehabilitation and that it was most unlikely that he would re-offend. His Honour took into account the effect that any sentence would have on the members of the appellant’s family and in particular, his youngest child. His Honour regarded general deterrence and denunciation as important considerations.

In relation to the sentencing exercise generally, in the Remarks on Sentence, his Honour said:

In relation to the sentences to be imposed, his Honour said:

His Honour reviewed the salient features of the offending:

His Honour set out his conclusions on sentence as follows:

The appellant submitted that his Honour erred in finding, at [188] of the Remarks on Sentence, that there was additional conduct in the supply offence which was not included in the conspiracy to import offence. The appellant submitted that the evidence to which his Honour referred was in fact relied upon by the Crown as evidence in support of the conclusion that the appellant was a party to the conspiracy to import. The appellant submitted that that evidence was not, therefore, evidence of additional criminality, or evidence that required additional punishment and certainly not evidence which justified an additional 4 years imprisonment.

The appellant submitted that as was noted by his Honour in his Remarks on Sentence, each of the three offences had the same aggravating features. He submitted that each of the offences had the same object in mind, i.e. the bringing into Australia and subsequent possession of a commercial quantity of pseudoephedrine. He submitted that the principles set out in Pearce v The Queen [1998] HCA 57; 194 CLR 610 were not followed and that he was as a result punished twice for the same conduct.

In the alternative, the appellant submitted that the overlap of facts giving rise to the three offences was so great that even if there were conduct specifically relating to the supply offence, which was not also encompassed by the import offence, that conduct was not such as to justify the significant difference in severity in the sentences imposed for those offences. It did not justify a difference of 4 years in the head sentence and 4 years in the non-parole period.

By way of elaboration, the appellant submitted that when his Honour imposed a sentence of imprisonment with a non-parole period of 12 years and a balance of term of 6 years in respect of the conspiracy to import offence, he was setting a benchmark to which the sentences for the other offences needed to conform. He submitted that when one had regard to the almost total overlap between the facts giving rise to the import offence and those giving rise to the supply offence, the difference between the sentences was not justified. He submitted that the sentences should have been either totally concurrent or that for the supply offence should have been only slightly greater than that for the conspiracy to import offence. He submitted that the moral culpability for each offence was the same because each offence had the same aggravating features. The appellant submitted that all of the conduct in the conspiracy to pervert the course of justice defence, with one negligible exception, was conduct in the supply offence and the conspiracy to import offence.

The appellant submitted that there was no real difference between the culpability associated with the supply offence and that associated with the conspiracy to import offence. In oral submissions, it was put in this way:

In essence, the appellant submitted that to the extent that there was any difference in the factual basis giving rise to the conspiracy to import offence and that giving rise to the supply offence, it did not justify the difference in the sentences imposed for each.

As was conceded by the appellant, the elements which go to make up the conspiracy to import offence and the supply offence are different: Standen Abuse of Process Judgment.

In the Standen Abuse of Process Judgment, Hodgson JA (with whom Adams and Hall JJ agreed), made the following observations which are relevant to the issues raised by the appellant.

Those observations by Hodgson JA are relevant to the appellant’s first submission to the effect that the facts which gave rise to the import offence were the same as those which gave rise to the supply offence. As a matter of semantics, that may be so, in that it is implicit that once an illegal substance has been brought into Australia there will be an attempt to supply it within Australia. As Hodgson JA appreciated (at [27]) while such an approach is open, the preferable approach is to look at the object that the particular actions were seeking to achieve, i.e. whether the actions were directly referable to supply within Australia, rather than importation.

In his Remarks on Sentence, his Honour specifically dealt with those actions of the appellant which were directly referable to supply and which occurred after delivery of the container to Jalalaty’s premises at Blacktown. He did this because of what was said in R v Campbell [2008] NSWCCA 214; 73 NSWLR 272. There, Spigelman CJ (with whom Weinberg AJA and Simpson J agreed) held that the word “imports” used in s 307.11 of the Criminal Code refers to the physical arrival of border controlled drugs and precursors in Australia from abroad when those drugs are delivered to a point which results in the goods remaining in Australia.

The matters identified by his Honour were those which had occurred after the delivery of the container on 28 May and included conversations which had occurred before the delivery of the container, but related to what should happen after it had been delivered.

Those conversations raised important issues. The conversation of 23 November 2007 between Jalalaty and the appellant had the appellant providing advice as to precautions to be taken concerning the bags and their possible link to Jalalaty (see pars [72]-[75] above). In a conversation of 21 May 2008 between Jalalaty and the appellant, he cautioned Jalalaty against the use of “helpers” (see par [116] above). On 28 May, Kinch sent a coded email to Jalalaty saying that it was nice to hear that “the children” were home and that they should be put in bed “until Dr Maurice says that they are fully recovered” (see par [126] above). This and other communications showed the importance which Kinch gave to the advice of the appellant.

In a conversation of 29 May 2008, the appellant passed on an instruction from Kinch not to unload the container. He advised Jalalaty that they should continue to communicate about purported legitimate business plans to provide an innocent explanation for the high level of contact between them. The appellant and Jalalaty discussed what false but plausible explanations they should give for the amounts of money which Jalalaty had been giving the appellant (see par [126] above).

On 31 May 2008, Kinch sent an email to the appellant congratulating him for keeping an eye on Jalalaty and encouraging him to continue with the project (see par [128] above). On 31 May, Kinch advised Jalalaty of the arrests of members of the Dutch syndicate and advised him to ask the appellant whether the drug should be moved (see par [128] above). On 1 June 2008, Kinch sent an email to the appellant asking him to assist Jalalaty in his so far unsuccessful attempts to find drugs among the rice (see par [130] above).

His Honour concluded that that additional material, in relation to the supply offence, showed how deeply the appellant was involved in the criminal venture and the importance of his role.

Accordingly, it is not correct to say that there were no additional facts relating to the supply offence which did not also relate to the import offence. This part of the ground of appeal has not been made out.

The appellant’s alternative argument depends upon an incorrect approach to Pearce. It is true that in Pearce, the majority (McHugh, Hayne and Callinan JJ) said at [40]:

That statement by the majority was made not as a stand alone proposition but as part of general guidance as to what approach should be followed in circumstances where an offender is convicted of offences which contain common elements.

The majority’s conclusion was:

What that means is that an appropriate sentence has to be formulated in respect of each offence. It is only when that has occurred that considerations of cumulation, concurrence and totality are taken into account to ensure that the overall sentence is within an appropriate range.

What one does not do (which was implicit in the appellant’s submissions) is to take the sentence for the conspiracy to import offence (simply because that was the sentence first imposed) and to use it as some kind of benchmark against which to measure the sentences imposed for the other offences. Apart from being contrary to the statement of principle in Pearce, such an approach has no regard to the maximum sentence available for each offence.

By way of illustration, if there were no conspiracy to import offence and no sentence for that offence, it could not be said looking at the supply offence on its own that the sentence imposed for it was “manifestly excessive”. When one took into account the maximum sentence for that offence, and the matters to which his Honour referred at [197] and [198], and his Honour’s overall assessment that the supply offence was above the middle of the range of objective seriousness for offences of its type, it could not be said that the sentence imposed for it was “unreasonable or plainly unjust”: Markarian v The Queen [2005] HCA 25; 228 CLR 357 at [25].

That being so, it is difficult to see how the fact that the appellant was sentenced for the conspiracy to import offence at the same time would provide a basis for why the sentence for the supply offence should be regarded as manifestly excessive. What was required in the sentencing process was an independent analysis of the elements of each offending in order to arrive at an appropriate sentence for each and to then make adjustments for concurrence, cumulation and totality. This is precisely what his Honour did.

This Court has followed his Honour’s approach in similar situations. The decision in Yousef Jidah v R [2014] NSWCCA 270 is an example. While the facts were not identical, the approach to sentencing for a drug supply count and a drug possession count, where there was a considerable factual overlap was the same. Relevantly, the Court (Bathurst CJ; Fullerton and Davies JJ) said:

By reference to basic sentencing principles, it is not correct to approach this sentencing exercise by artificially seeking to separate out the conduct that was solely referable to the supply offence and to argue that an additional 4 years in sentence was excessive for such conduct. His Honour was performing quite a different exercise with respect to the supply count and each of the other counts and the exercise which he was performing was in accordance with the guidance provided by Pearce. His Honour imposed an appropriate sentence for each offence and then adjusted the overall sentence to take into account totality.

His Honour was conscious of the difficulty of the sentencing exercise and in particular of the need to avoid punishing the appellant twice for the same offending. It was for this reason that his Honour was at pains to identify factual elements which related only to the supply offence. It is not without significance that his Honour identified the supply offence (and not the conspiracy to import offence) as the principal offence. The correct approach to the sentences was to start with the supply offence and to then take into account the sentences imposed for the other offences. When carrying out that exercise, the difference in the maximum penalties was of importance. The difference in the sentences reflected both the additional conduct in the supply offence and the fact that the sentence was determined against a higher maximum penalty.

It follows that there was no contravention of the guidance provided in Pearce.

This ground of appeal has not been made out.

The following orders should be made: