By Paul Gregoire and Ugur Nedim
In the mid-1970s, the “Mr Asia” drug syndicate commenced operations. It was a multi-million-dollar criminal network initially importing cannabis and then heroin from Southeast Asia into Australia, New Zealand and the UK, via Singapore distributor Choo Cheng Kui or Chinese Jack.
James “Diamond Jim” Shepherd was initially the network’s banker. But after the then head of the smuggling ring, Terry Clark, was sentenced to life in prison in the UK over his having contracted the 1979 killing of his boss “Mr Asia” Marty Johnstone, Shepherd took over the reins of the business.
In 1986, Shepherd was sentenced to 25 years prison time, going on to serve 15, for conspiring to import a commercial quantity of border controlled drug, namely heroin. Shepherd appealed his conviction on a number of grounds, which included that the trial judge had failed to give the jury the Chamberlain direction.
The Chamberlain direction
The Chamberlain direction applies to cases based on circumstantial evidence, which are facts not drawn from direct observations but implied due to conclusions one is led to via inference or reasoning. The direction, more recently applied in The Queen v Baden Clay (2016) 258 CLR 308, makes clear that a defendant is entitled to an acquittal in a circumstantial case if the prosecution is unable to exclude beyond reasonable doubt any hypothesis consistent with innocence.
The Shepherd direction
The Shepherd direction builds on the direction in Chamberlain and Baden Clay.
It makes clear that while no specific fact or circumstance must as a general rule be proved in a circumstantial case, any single or series of facts fundamental to guilt must indeed be proven beyond reasonable doubt – and juries must be informed of this requirement where relevant.
The New South Wales Court of Criminal Appeal
During Shepherd’s initial appeal to the New South Wales Court of Criminal Appeal (NSWCCA), the court ruled that an error had occurred due to the failure of the primary judge to give the jury the Chamberlain direction. Yet, two subsequent rulings by differently constituted NSWCCA benches found no substantial miscarriage of justice and dismissed the case.
So, in 1990, Shepherd applied to the High Court of Australia for special leave to appeal his matter, and he was granted it.
High Court of Australia
In the nation’s highest court, Shepherd raised three grounds of appeal regarding his conviction. The first consisted of the court having made an error in relation to section 6(1) of the Criminal Appeal Act 1912 (NSW), which states that an appeal is warranted when a verdict is unreasonable or a miscarriage of justice has occurred.
The New Zealand-born man further claimed that “the indictment was unknown to the law”, and that the appeals court had been in error in not finding that the primary judge was at fault for not dismissing the jury during the trial.
The High Court ruled out appealing on the latter two points and agreed to consider the first ground, which, as Justice Sir Daryl Dawson explained, boiled down to whether the trial judge should have cited the Chamberlain direction to the jury.
His Honour then pointed out that the primary judge had given “the customary direction”, which is that where the jury relies upon circumstantial evidence, guilt should not only be a rational inference but should be the only rational inference that could be drawn from the circumstances”.
The High Court Justice further set out that it is in no way incumbent upon a primary judge to further elaborate on the necessity of guilt only being found in circumstances proven beyond reasonable doubt, as this is what the above mentioned “customary direction” does.
However, some intermediate facts do constitute indispensable links in a chain of reasoning towards an inference of guilt, his Honour added, and in these cases a judge should direct the jury to the need for this fact to be proven beyond reasonable doubt.
Although Justice Dawson further explained that while the prosecution bears the burden of proving how a crime occurred in a manner that leaves no room for alternative versions of events, this does not mean that every single piece of evidence relied upon has to be scrutinised to that degree.
According to his Honour, this is what the High Court justices that presided over 1984’s Chamberlain versus The Queen actually meant in their ruling, as they were implying that it is beneficial that a jury be made aware of any “intermediate fact as an indispensable basis for an inference of guilt”.
And as to when a direction should be given to a jury in the case of an indispensable intermediate fact arising, that will “depend upon a particular case”, his Honour added, as well as whether such a direction is needed, as in situations where this is obvious, “the instruction may not be helpful”.
The Shepherd case
After setting out the circumstances of when a direction ought to be given in regard to an indeterminate fact, Justice Dawson then explained that Shepherd’s case was not one that required any such intervention.
The evidence, his Honour outlined, fell into “three broad categories”. The first comprised of two police officers stating that they were in a cell with both Shepherd and Clark, when the latter told the former that he would have to take care of the business as he’d be serving time in gaol.
The second set of evidence was provided by a number of people involved in the drug network, who, in exchange for immunity, gave evidence that large quantities of heroin were being brought into Australia and distributed by Shepherd.
And a set of bank transactions made up the third category of evidence, which were supposed to show that Shepherd and Clark were divvying up the profits from the drug trafficking.
Justice Dawson ruled that whilst the evidence could be broken up in this manner, there was no reason for the jury to consider one set before the other, and as there was no indispensable fact, his Honour considered that the jury should have contemplated all of the evidence together.
“Of course, the jury could not properly have made that inference unless they were satisfied that, upon the whole of the evidence in all three categories, there was no reasonable explanation consistent with the applicant’s innocence,” the High Court justice insisted.
And in conclusion, he made clear that the “customary direction” – that the evidence be proven beyond reasonable doubt – that was given by the primary judge was more than sufficient for such a case.
On 19 December 1990, Justice Dawson dismissed the appeal. High Court Justices John Toohey and Mary Gaudron agreed with their colleague’s reasoning. And while Justice Michael McHugh agreed the case should be dismissed, he gave different reasons.
Then High Court Chief Justice Sir Anthony Mason agreed with both Dawson’s and McHugh’s findings.