Chew v The Queen; Edwards v The Queen

[1991] HCATrans 349

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Perth No P37 of 1991

Between:

STEPHEN CHEW

Appellant

and

THE QUEEN

Respondent

Office of the Registry

Perth No P40 of 1991

Between:

KEVIN JOHN EDWARDS

Appellant

and

THE QUEEN

Respondent

MASON CJ

BRENNAN J

Chew( 3) 88 11/12/91

DEANE J

DAWSON J

TOOHEY J

GAUDRON J

McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 11 DECEMBER 1991, AT 10.18 AM

(Continued from 10/12/91)

Copyright in the High Court of Australia

MASON CJ: Yes, Mr McKecknie?

MR McKECHNIE: If Your Honour please, I propose this morning

just to conclude some brief remarks in relation to

the intent of the section; to deal, if it matters,

with whether section 23 has relevance to the

matter; to deal with the proviso. I do not propose

specifically, Your Honour, in view of time, to deal

with ground 2 of the appellant Edwards' matter, but

rely on the submission as we have set them out in

the written form. In dealing with section 229, may

I withdraw a somewhat unusual answer to Your Honour

yesterday, in relation to causation and detriment,

about foreseeability? Can I just, in concluding

our remarks on section 229, state again our

submission that sectio 229 is not an unusual

provision, 229(4), in 8eing an offence without a

specific intention necessary to be proved, but an

offence which takes its character of seriousness as

a result of the consequences which are achieved.

One really does not need to look any further

than the present cases. The criminality, we would

say, is the use of position improperly, which

results in a loss or a benefit of $7.7 million, in

one case, or in a liability of $6 million in
another case, to show that the legislature well
intended - this offence be one of the class of

offences which is appropriate not to be judged by

the particular intent of the actor.

McHUGH J: What about the question of detriment. In

Edwards' case, they seem to have accepted the view that the mere payment of the money over because of the risk involved, and perhaps because of questions

of preference itself, constituted a detriment,

although there was no detriment in fact. What do

you look at in terms of detriment? Do you have to

wait years to see whether or not there has been a

detriment, or is the moment the money is put at

risk itself sufficient to constitute detriment?

MR McKECHNIE:	I am sure the answer depends, Your Honour, in the circumstances. In that case, the creation of
the $6 million liability had a fairly dramatic
detriment the next day when Western Collieries went
to the bank and found that they were $6 million
lighter than they were the night before and had, I
think, difficulty in their payroll.
McHUGH J:	On the other hand, at least it has got a paper

asset to balance that $6 million.

MR McKECHNIE: That is right. They have loaned it and they

have put it on deposit. I am sure it is a question

of fact in each case, and there may be cases where it is not. I think in this case issue was joined,

Chew( 3) 89 11/12/91

but it was put fairly clearly that in the

circumstances this was a detriment. But there may

well be cases where creation of that liability is
not a detriment and a factual question for the

jury.

TOOHEY J:	The point might assume more importance because of the construction that you ask us to place upon the
section which looks to the creation of a detriment,
not merely an intent to cause a detriment. So on
your argument, there would have to be a detriment
shown before the section could operate.
MR McKECHNIE:	Yes, there would have to be an actual

creation; the intent is immaterial.

MR McKECHNIE:  Your Honours, we come back by analogy,

because the section has not been previously

construed or considered in this manner to other
crimes, and the crime we choose again is dangerous

driving causing death, which may be an imperfect

analogy but does seem to involve these elements:

the driving must be a willed act, or at least an

adverted act; the element of dangerousness in

relation to the driving is an objective test not to

be judged by the driver, although the driver's

views are, of course, relevant, but an objective

test for the jury in the same way as we would say

impropriety here is; and it must have a

consequence, that is, the causation of death.

DAWSON J:  No one doubts that, and that argument would be

conclusive if, in fact, the word "causing" was

used, but it is not.

MR McKECHNIE: Well, it is used in relation to "detriment"

here.

DAWSON J: Yes, but not in that way. It is the infinitive,

is it not?

MR McKECHNIE:	Yes, well, that is, I suppose, the question.
DAWSON J: Yes.
MR McKECHNIE:	We submit that there is no effective

difference and it follows from that, in our

submission, there is no latent ambiguity - as there

is, for instance, in the word "false" - in the use

of the words "gain" and "to cause".

The final matter in relation to the question

of the construction of the section - and we really
see that as all important, as I come to develop

short arguments in relation to the Criminal Code -

in the end, in our submission, I do not know that

it really matters because if, as a matter of

Chew(3 90 11/12/91

construction, the crime is one of a specific

intent, I am not sure - I think that answer comes

from the construction of the section rather than

whether it is a willed act under section 23 or

there is a basic mens rea in the common law.

Having considered Your Honour Justice Deane's

point overnight in relation to the fact that this

is a prohibition, I have considered it and I have

considered where it might take one, but in our

respectful submission, in the end it is not
decisive or greatly helpful to the resolution of

the construction of the section to put it in the

terms that this does, that there has to be a

positive making use of information. In the end we

would submit that does not answer the question as

to whether or not the result is a result which

Parliament intended that the prosecution would need

to prove was a foreseeable consequence in the full

intention or it may, of course, be something less.

TOOHEY J: But, Mr McKechnie, the operation of the second

paragraph of section 23 has to be a question of

construction, does it not? Unless the intention is

expressly declared, then the paragraph does not

operate.

MR MCKECHNIE: 

Yes.

TOOHEY J: 

It does not suggest there is something you can

import into the section in creating the offence by
way of analogy or something else, it has to be
found there in express terms, whatever that might

mean.

MR McKECHNIE: Indeed. It was not stated by us but that is

implicit in all our submission and, of course, this

is a crime where there is no express expression by

the legislature in the way, for instance, that

section 229(l)(b) is expressed, and, indeed, both

in the common law and in statutes, Crimes Acts and

the like in common law jurisdictions and in the

Criminal Codes, the most common, almost universal

way, by which a legislature requires intent to be

proved is simply to say "with intent" or words to

that effect. It is not entirely universal, I

concede.

DAWSON J:  Do we ever get to section 23? If you are right

you do not get to it; if you are wrong you do not

get to it either. So it really disappears, does it

not?

MR McKECHNIE: Largely, yes, and I will just develop a few

short submissions on that because it was raised.

Your Honours will appreciate in the Chew appeal it

did not seem to be an issue; probably because the

Chew(3) 91 11/12/91

whole thing appeared for the first time in the

appeal. It never seemed to be an issue, whether or

not the mental element was taken from section 23 or

not; it was resolved; it did not seem to have

been argued.

In the Edwards appeal, it was an issue and,

indeed, counsel for Lloyd submitted that section 23

did not apply in relation to the mens rea, as I

understand the appeal book, and counsel for

Edwards, contrary to his submission No 6 before

Your Honours, submitted that section 3 did not

apply there.

It probably does not matter in this sense,

Your Honour, that we do not understand that there

is any great difference, in any event, between the

second paragraph of section 23 and the common law

in any event, as understood, that section 23 was

really reflecting the common law of the time, or

that paragraph of it.

In our submissions to Your Honours in relation

to the co-operative scheme by which these

prosecutions were brought, there was no intention

by the legislature of Western Australia to exclude

the operations of criminal responsibility within

Chapter V of the Criminal Code. There is nothing

unusual in the co-operative scheme finding

different expressions of criminal responsibility in

different jurisdictions. To take, by way of

example, the criminal procedure by which a person

may be tried for a section 229(4) offence will

differ in different jurisdictions.

McHUGH J: But the last thing that you would expect in a

uniform Companies Code is that the substance of law

should vary from State to State.

MR McKECHNIE: With respect, Your Honour, I think, having

regard to the history of Federation that is what
you would expect in a co-operative scheme.	It is
not what there is now, in our submission, in

relation to the Corporation's law, which is not

this case, although it has some relevance because

section 229(4) is replicated in the Corporation's

law, but contrary to our submissions on this, if it

mattered we would have thought that the

Corporation's law, whatever else may be said about

it, evinced a very clear intention to exclude the provisions of the Criminal Code, and could not do

it more clearly; whether it is achieved is another

matter which can wait.

That does it clearly, but you see,

Your Honours, as my friend took you to yesterday,

the co-operative scheme has some problems in its

Chew(3) 92 11/12/91

interpretation, but section 38, which deals with

aiding and abetting and replaces, particularly in

Queensland and Western Australia a form of criminal

responsibility for secondary offenders, proceeds in

section 38(3):

Nothing in this section shall be taken to

affect the application in relation to any

relevant Code of the provisions (other

than ..... of the Criminal Code.

Provisions to like effect are found in every State

jurisdiction. In our respectful submission, it is
powerful evidence that the legislature intended

that the particular State provisions of criminal

responsibility would apply. After all, as it was

and is a piece of State legislation, there was an

equal argument, in answer to Your Honour's

proposition of a uniform scheme, that a State

Parliament would expect that its State citizens

charged with offences would be dealt with in a

uniform measure of criminal responsibility.

In the end, as we say, I am not sure that it

makes any difference because whether one takes the
willed act view that Justice Murray did firmly

within section 23, or the view of the Chief Justice

who expressed it to be within section 23 but seemed

to expand somewhat the knowledge into a common law

mens rea, I think his attempt at achieving some

degree of uniformity, the essential question is

still the construction of section 229(4) and

whether regardless of, as it were, the basic mens

rea, there is that further requirement for a

specific intent to cause the result.

I do not know that that answer is assisted by

debaters to the mens rea or the willed act and has
to be done by way of construction of the section,

because the common law does not in all cases carry

mens rea to a specific intention of the result. It

does in some offences, and it is a question in each

case of what the offence is.

Can I finally deal, Your Honours, with the

question of the application of the proviso in each

case.

DEANE J: Before you depart from that, what do you say about

section 7 of the Companies and Securities

et cetera - it is at page 60 of these documents?

MR McKECHNIE:  Thank you, Your Honour. I did, in fact,

intend to make a comment in relation to this

section and I overlooked it. We would say two

things in answer to it: one is as a matter of

interpretation of this Act, it does not stand with

Chew( 3) 93 11/12/91

other sections, particularly section 38 so as to

evince an intention to interpret section 229(4) in

a manner so as to exclude criminal responsibility

provisions of the Criminal Code; and secondly, we

would see a difference between the interpretation

of the Companies Code, including section 229(4),

and the application of criminal responsibility in

relation to that section.

DEANE J: That, in one sense, reverses the question, and

that is, is section 23, and the common law

operative in the Australian Capital Territory, a

law in force in the Australian Capital Territory

that relates to the interpretation of ordinances?

MR McKECHNIE:  No, is our answer.

DEANE J: Well, it is easy to give that answer. It is not

so easy to work out what is the right answer.

MR McKECHNIE:  Yes, well, we would submit it is also the

right answer, Your Honour, but, in particular, the

purpose of the exercise, in a sense, is to construe

section 229(4) to see whether it has within it an

express provision for the intention to cause a

particular result. I would not have thought there was any argument that there is a mental element in section 229, however approached, and we do not put

our argument any other way. In that construction

one, in our submission, takes account of section 36

of the Criminal Code of Western Australia simply

because there is no pro tanto repeal of that

section by any of the cooperative scheme

legislation and section 23, if it applies, is not

to apply to interpret section 229(4) in any way.

DEANE J: Well, it depends how you ask it, does it not?

Assume there was an ordinance in the ACT which

said, "In interpreting ordinances creating criminal

offences there is a strong presumption that a

requirement of mens rea is to be implied.", that

would squarely come within section 7. Well now, it

can be assumed that there is a common law rule of

construction operative in the Australian Capital

Territory to that effect. What I am asking you

about is whether than common law rule of

construction is caught by section 7 and, if it is,
how, in the context of section 7, could it be

overridden by the provisions of the Code operating as a rule of construction of the subsection we are

concerned with?

MR McKECHNIE: In the end, perhaps, Your Honour, the

question is - I am sure the ultimate question is,

"What was the intention of the Parliament of

Western Australia in enacting the co-operative

scheme legislation? Was its intention and did it

Chew(3) 94 11/12/91

in fact achieve a pro tanto repeal of section 36 of
the Criminal Code by virtue of section 7 or any
other section?"

In our respectful submission, that is the correct question and the answer to that question is

"No", and the reason we say "No" is, in part,

because of other provisions such as section 38(3)

which quite clearly contemplate the continuation of

the Criminal Code relevant to the Companies Code.

If I can turn now, finally, Your Honours, to the question of the proviso. In relation to

Edwards, it probably is not raised in that in

Edwards' case the court below was prepared to apply

the proviso to section 689 and the appeal to this

Court does not challenge the lower court's

application of the proviso. In Chew's case, of

course, the matter is different because the Chief

Justice applied the proviso, Justice Murray did not and, of course, Justice Wallwork dissented.

We would make two short comments in closing in

relation to that: the first is that my learned

friend yesterday read - and I do not propose to

repeat - the portions of His Honour the trial

judge's sununing up. He read from pages 851, 852

and 853. We would add to that page 840. In our

submission, the effect of that, we would say the

unnecessary effect, was clearly to require the jury

to have regard and to be satisfied as to the

purpose for which the appellant entered into the

transactions.

If that be not accepted, in our submission,

for the reasons set out by the Chief Justice, this

was a case suitable for the application of the
proviso, having regard to the appropriate

authorities as His Honour did.

It was, in real terms, a case where the

overwhelming evidence was as to the intention

DEANE J:  Mr McKechnie, can you indicate for me where, on

840, I should look?

MR McKECHNIE:  I am sorry, Your Honour. It is not a

direction to purpose but it is in the second

paragraph and the third paragraph on that page in

relation to:

for example, in one of the counts~ Chew

sought to obtain a benefit by authorizing an

act -

Chew(3) 95 11/12/91

It is only a passing reference but the other references are more clear in the passage my friend read out.

The Crown case - which is summarized by

His Honour the Chief Justice at pages 934 and 935, there he, in fact, quotes from the Crown case - was

supported and this was a case of a use of position

which, in our respectful submission, the inevitable

conclusion would have been that the use of the

position was with the intention of gaining the

consequences, especially when it be remembered the

appellant's position as a businessman and as a

solicitor, and of the fact that there was not one

but many authorizations, letters and the like,

leading to the eventual results as set out in the
indictment. It is not a case of one act being done
but several leading to a result which he must have

appreciated, relieved him of the liability of

$7.7 million and in counterpoise caused the company

loss of $7.7 million.

The specific counts on the indictment which

were pleaded in a way that required the prosecution

to prove more than it need, as a matter of law, but

in counterpoise was appropriate set - - -

TOOHEY J: What do you mean, Mr McKechnie, by saying that

the Crown accepted a burden which was greater than

it needed? I understand it in relation to the

detriment advantage point.

MR MCKECHNIE: That was the point.

TOOHEY J: That is the point, is it?

MR McKECHNIE:  Yes. The Crown could have simply pleaded the

advantage, and led evidence of the detriment or vice versa. Indeed, in many of these cases the matter came up in relation to Edwards in answer to

a question to my friend yesterday.	Of course, it
will be generally, but not always, the case that a
benefit has a corresponding detriment.	Not always,
but in this case it did.	Over a period of months

there were letters written, authorizations given

not, as I say, at the one time, but over a period
of months, leading to the result which was

achieved. In our respectful submission, it was

inevitable as the Chief Justice found, that the

appellant who did not give evidence at the trial

must have intended the result which was, in fact,

achieved. Certainly the result is to the benefit

and the detriment followed.

If Your Honours please, it is probably not necessary for me to go to the exhibits, but could I

just advise Your Honours in relation to count 1 and

Chew(3) 96 11/12/91

the general issue of the payments of $7.7 million

to discharge the debts. There was a series of

correspondence in relation to Wayne Holdings and

the private companies which are found in

exhibits 5, 6, 7, 8, 9, 10, 11 and 12, 27 and 28.

I just use those as an example, Your Honour, of the

nature of the transactions by which the

Chief Justice was able to conclude that this was an

appropriate case, notwithstanding the tests for the

application of the proviso should it be necessary,

and to invite Your Honours to do the same.

If Your Honours please, as I said I do not intend to deal in oral argument with the

submissions in relation to ground 2 of Edwards

appeal. I rely on the written submissions and on

the judgment of the Chief Justice. If Your ~onours
please, those are our submissions.

MASON CJ: Thank you, Mr McKechnie. Yes, Mr Williams. MR WILLIAMS: Your Honours, we reply only on one point

raised by my learned friend. It is an issue first

raised, in fact, by Justice McHugh in the context

of the construction of the section. The question

is if results are an element of the offence as

distinct from the intention to cause results, how

long do you wait for those results to occur? This,

in our submission, is a cogent argument in support
of the construction for which we have made our
primary submissions, and the events in the Chew

case, I think, reveal the difficulties that arise

if one looks to results as distinct from the

intention at the time.

It raises a question of admissibility of

evidence for the trial, a question that was much
debated during the course of the trial. The Crown

case sought to introduce evidence to demonstrate

results that went for some months after the
relevant acts of using position as alleged were

completed. That was contested, but in the end the

trial judge allowed it in. It could only be

admissible if results are a constituted element.

It could not have been admissible if the intention

to cause a result was what was fundamental.

The propriety of what occurred would then be a

question which would be tested at the time the act

of using a position with an intention occurred and

the evidence that might have been admissible in

relation to consequences would not have otherwise

been admissible in relation to the question of
propriety. That is the only point on which we seek

to reply.

MASON CJ: Thank you, Mr Williams. Mr Roberts-Smith.

Chew(3)	97 MR ROBERTS-SMITH QC 11/12/91
MR ROBERTS-SMITH:	Your Honours, there are two brief points

we would wish to make in response to the

submissions by the Crown, but before dealing with

those I might also make a comment, perhaps, arising out of what has just been said by my learned friend

Mr Williams also.

Your Honour Justice McHugh raised the question of the crystallization of the detriment, in

particular, in terms of time. So far as the case

of Edwards was concerned, the Crown case, and

His Honour's directions to the jury, were

effectively put on the basis that the relevant time

was the time the loan was obtained by Western

Collieries and placed on deposit with Rothwells.

That is important in the context of this case,

in our submission, because if Edwards had any

belief at all at that time about detriment, for

example, or indeed about Lloyd's intent in relation

to detriment, it was, for the reasons that we

canvassed yesterday, that there was no detriment or

would be no detriment. But as to that, without

going to it, I might perhaps draw Your Honour's

attention to what appears at page 120 at the very

bottom of the page in the judgment of von Lieven v

Stewart, which is No 13 on our list of authorities.

As to the two points arising specifically and

directly out of the submissions by the Crown, first

of all the analogy of dangerous driving causing

death is an analogy which, in our submission, very

much supports the argument which we have been

advancing, because if one considers the formulation

of an offence of that kind in a different way, for

example an offence which prohibited or which made

it an offence to engage in dangerous driving to

cause death, to use the words in section 229(4), the result in our submission would manifestly be quite the contrary of a requirement for merely an

objective test.	It would be the contrary of my
learned friend's submissions and that, we say, well

illustrates the very proposition that we seek to

advance.

The other point is that my learned friend

Mr McKechnie said a moment ago that the Edwards

appeal did not challenge the application of the
proviso in the court below. The reality of that,
of course, is that the members of the court below
applied the proviso on the basis that they reached

a conclusion as to the mental element of

section 229(4) which was different from the way the

trial judge left it to the jury.

Chew( 3) 98 11/12/91

It did not go as far as we submitted it should go, but it went further than the trial judge's view

and it was on that basis that Their Honours applied

the proviso. It was not applied on the basis of

any prospect that if the correct view were that

there was a strict intent, a specific intent

required, then in the circumstances the proviso

should be applied. They did not deal with it at

all in that way.

As to the second ground, the question of the

proviso did not apply at all, did not arise at all
because, of course, Their Honours simply did not
accept the ground; they said it was wrong and

dismissed the appeal in relation to it. The

question did not arise. Those are our submissions,

Your Honours.

MASON CJ: Thank you, Mr Roberts-Smith. The Court will

consider its decision in this matter.

AT 10.53 AM THE MATTER WAS ADJOURNED SINE DIE

Chew( 3) 99 11/12/91