Daniel Terrance Leslie Schmidt v Matthew Geoffrey Box

[2010] ACTCA 26

DANIEL TERRANCE LESLIE SCHMIDT v MATTHEW GEOFFREY BOX
[2010] ACTCA 26 (5 November 2010)

APPEAL – appeal from Supreme Court appellate jurisdiction – appeal against conviction – correlation of electronic record of transactions and CCTV footage – charges not proved beyond reasonable doubt – appeal allowed – convictions set aside – verdict of acquittal entered.

Hillier v The Queen (2007) 228 CLR 618
Woolmington v Director of Public Prosecutions [1935] AC 462

ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

No. ACTCA 28-2009
No. SCA 21 of 2008

Judges:         Gray P, Penfold and Rares JJ
Court of Appeal of the Australian Capital Territory
Date:            5 November 2010

IN THE SUPREME COURT OF THE       )          No. ACTCA 28-2009
  )          No. SCA 21 of 2008
AUSTRALIAN CAPITAL TERRITORY    )
  )

COURT OF APPEAL  )

ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN:DANIEL TERRANCE LESLIE SCHMIDT

Appellant

AND:MATTHEW GEOFFREY BOX

Respondent

ORDER

Judges:  Gray P, Penfold and Rares JJ
Date:  5 November 2010 
Place:  Canberra

THE COURT ORDERS THAT:

1. The appeal be allowed.

1. Orders 1 and 3 made by the Supreme Court on 3 September 2009 be set aside and in lieu thereof it be ordered that:

1.The appeal be allowed in respect of CC 2007/9926, 9927, 9928 and 9935, each conviction be set aside and a verdict of acquittal be substituted.

1. Costs be reserved.

IN THE SUPREME COURT OF THE       )          No. ACTCA 28-2009
  )          No. SCA 21 of 2008
AUSTRALIAN CAPITAL TERRITORY    )
  )

COURT OF APPEAL  )

ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN:DANIEL TERRANCE LESLIE SCHMIDT

Appellant

AND:MATTHEW GEOFFREY BOX

Respondent

Judges:  Gray P, Penfold and Rares JJ
Date:  5 November 2010 
Place:  Canberra

REASONS FOR JUDGMENT

GRAY P and RARES J:

1. At the conclusion of the argument the Court made orders allowing the appeal from the decision of the primary judge.  In a judgment delivered on 3 September 2009, his Honour dismissed an appeal from the Magistrates Court against the appellant’s convictions on four charges of theft.  This Court ordered that the appeal be allowed, the convictions set aside, and verdicts of acquittal be entered for each charge.  These are the reasons why we made those orders.

The prosecution case

1. In March 2007 the appellant, Daniel Schmidt, was employed at the liquor outlet of Woolworths Ltd at Dickson.  He came under suspicion for having processed a significant number of allegedly fictitious refund transactions.  In October 2007 Mr Schmidt was charged with five counts of dishonestly appropriating cash belonging to Woolworths with the intention of permanently depriving it of that property.  Three charges related to refund transactions on 19 March 2007 and two to refund transactions on 26 March 2007.  The appellant pleaded not guilty.  He had stood his trial over three days in March 2008 in the Magistrates Court.  The magistrate convicted him on all five charges on 13 March 2008.  The primary judge allowed an appeal against conviction on one of the two counts alleged on 26 March 2007 and that matter was not in issue on this appeal.

1. The prosecution case was essentially that the appellant had stolen cash from the electronic cash register at the liquor store at which he worked.  The prosecution alleged that he had contrived fictitious refund transactions that, when entered into the computer cash register records, enabled him to remove cash from the cash register equal to the refund amount.

1. The prosecution case relied upon the evidence given by Mr Ian Hunter, a loss prevention investigator employed by Woolworths, CCTV footage of the appellant’s work station in the liquor store and electronic journal receipts evidencing the transactions the subject of the charges.

1. The prosecution adduced evidence to the following effect in support of that case:

·        the appellant’s unique employee code had been used on each of the five  computer cash register records of the refunds;

·        importantly, in order to process refunds, a supervisor had to enter his or her authorisation PIN code into the same cash register which code, theoretically, was not available to anyone else;

·        each of the impugned refund records had a code for a supervisor who was not on duty at the time at which the relevant transaction was recorded;

·        each of the supervisors whose code was used in that way was not at work at the time and each denied that he or she had authorised the relevant refund;

·        as a result of a query concerning a refund that had been processed, Mr Hunter had reviewed CCTV footage of the appellant’s work station for each day in the period 1 March 2007 to 2 April 2007 recorded on VHS video tape;

·        the CCTV footage depicted a view from the entrance of the outlet towards the interior and showed the counter area, including the appellant’s work area and cash registers;

·        Mr Hunter said that he had correlated the transactions on the computer cash register journal with what was depicted on the CCTV footage and that these, in turn, as far as recorded times were concerned, could differ from and needed to be reconciled with the computer cash register journal;

·        Mr Hunter sought to identify transactions in the computer cash register journal on either side of each refund and then reviewed the CCTV footage to locate surrounding transactions.  This process formed the critical part of the prosecution case;

·        Mr Hunter’s review located both CCTV footage and journal records for what he said were the transactions immediately before the five incidents the subject of the charges in the Magistrates Court;

·        Mr Hunter noted what, he asserted, were the similarities between the journal records and CCTV footage.  The four charges before this Court involved CCTV footage that Mr Hunter identified as recording the time of the refund transactions the subject of the four charges;

·        the CCTV footage so identified by Mr Hunter showed the appellant alone at the cash register without any customer, supervisor or returned goods present.  The CCTV footage, indistinctly, showed the appellant appearing to use the cash register;

·        at the end of each shift, or day, the cash in the cash register reconciled, at least approximately, with the computer cash register journal.  Thus, the cash that the impugned records showed as having been refunded had been paid out of the cash register.

1. Both the magistrate and the primary judge said that the prosecution case was confused and presented confusingly.  That criticism was well founded.  The prosecution case was presented in a disorganised and unsatisfactory manner.  That made it unnecessarily difficult to follow. 

1. One instance of the failure of the prosecution to properly present the detail necessary to establish its case relates to a refund transaction involving $290.86 on 26 March 2007.  The prosecution tendered, without objection, an undated and untimed document cash register print out that simply recorded:

NO SALE

PICK-UP

OPEN DRAWER        

According to Mr Hunter, that document recorded a standard procedure for sending cash from the cash registers to the cash office.  However, this process did not appear on the CCTV footage.  Mr Hunter asserted that this unprepossessing document was the transaction in the computer cash register journal immediately before a refund for $290.86 that had occurred at 22:03 on 26 March 2007.  The prosecution claimed that these two documents, by themselves, correlated to CCTV footage that bore a time imprint of 23:02:08.  The refund receipt recorded that two cartons of Pure Blonde beer, one carton of 30 VB Gold cans, one carton of 24 James Boags beers, one carton of 24 Bacardi Breezers and one six-pack of Bundaberg OP Rum were returned.  No goods were shown as being returned or scanned on the CCTV footage.  Nor was any explanation tendered of how goods not scanned could have been recorded on an electronic record of the refund.

1. The CCTV footage showed the appellant at the cash register during the times asserted for both the undated, untimed document and the refund document.  He appeared to do something to a touch computer screen at a cash register at the approximate times Mr Hunter claimed correlated with the creation of the two documents, after allowing for a time adjustment for the change from daylight saving that had not yet been made in the recording of the CCTV footage times.

1. Both the magistrate and the primary judge accepted Mr Hunter’s evidence that he had reviewed and correlated the computer cash register journals and CCTV footage, identifying carefully the antecedent and subsequent computer records surrounding the impugned refunds with the footage tendered in evidence.

1. Mr Hunter gave unchallenged evidence that he had handed the original VHS video tapes that he had reviewed and used in his correlation exercise to the police.  He said those tapes had two times on them, one at the top from which he worked and one lower down on the CCTV footage recording.  The police converted the VHS tapes to a DVD which omitted the top time record that had been on the VHS tapes.  The DVD was tendered as the evidence on which the prosecution relied.  Mr Hunter had some difficulties reconciling his earlier work with the DVD times.  That was because he said his work had been based on the, possibly, different times recorded higher on the VHS tapes that had not been reproduced on the DVD.

The appeal

1. Only one ground was argued on appeal, namely that the verdicts were unsafe and unsatisfactory.

1. During the course of argument, counsel for the Director of Public Prosecutions referred to the evidence of one of the supervisors, Ms Siljkovic.  She was authorised to approve any refunds at the liquor outlet.  She denied authorising or processing one of the impugned refunds made on 19 March 2007 that contained her authorisation code.  Ms Siljkovic was not at work at the time of the transaction.

1. Counsel had referred the Court to her evidence to explain the procedure for processing a refund.  She said that first, some goods had to be presented to an employee for return to the outlet.  She said that next, a supervisor had to go to a cash register and enter his or her user identification and then a password.  The supervisor then used the refund button and scanned the goods, before the refund was finalised by handing the customer cash or processing an EFTPOS transaction.  Ms Siljkovic confirmed in cross-examination that when a refund was processed, the goods were scanned and this recorded them being re-entered into the store’s stock records.

1. That evidence of Ms Siljkovic does not appear to have been referred to in argument before the magistrate or the primary judge.  The Court drew attention to its significance once we had been taken to it.  It demonstrated that it was necessary for the goods shown on the computer cash register journal to be scanned in order to process a refund.  The informant accepted that the prosecution had not explained how what was depicted on the CCTV footage could have recorded the impugned refunds when there was no footage of any goods being scanned by the appellant.  Thus, there was no explanation in evidence of how a refund could have been processed which recorded particular goods being returned without those goods being scanned at the cash register.  Before us, counsel for the Director of Public Prosecutions conceded that this was a fundamental difficulty in the prosecution case.

1. We allowed the appeal because of that gap in the prosecution case.  That gap had not been explained, demonstrated or made the subject of argument in the two hearings below.  The magistrate and primary judge were not invited to consider it.  However, there was no evidence to explain how the appellant could have processed the impugned refunds without scanning bulky cartons, if what was depicted on the CCTV footage showed the actual times that those refunds occurred, as the prosecution alleged.

1. The absence of such an explanation suggested that there was reasonable doubt about whether the CCTV footage did depict the appellant processing the impugned refunds, without goods being returned by customers.  This raised an inference consistent with the appellant’s innocence – namely that the CCTV footage did not correlate to the times of the impugned refunds.  There was no evidence of any stock shortages that could otherwise have sustained a suggestion that no goods had been returned for the impugned refund transactions:  cf  Hillier v The Queen (2007) 228 CLR 618 (at 637 [46]) per Gummow, Hayne and Crennan JJ.

1. The convictions could not be sustained.  Ms Siljkovic’s evidence was that there was a need to scan the goods to obtain a refund and no evidence was led to explain how the appellant could have circumvented that need.

1. The golden thread throughout the web of the criminal law is that it is the duty of the prosecution to prove the guilt of the accused beyond reasonable doubt:  Woolmington v Director of Public Prosecutions [1935] AC 462 at 481 per Viscount Sankey LC. This rule is subject to any statutory exception, but none is present here.

1. These were our reasons for allowing the appeal.

   I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of their Honours President Gray and Justice Rares.

   Associate:

   Date:      5 November 2010

IN THE SUPREME COURT OF THE       )          No. ACTCA 28-2009
  )          No. SCA 21 of 2008
AUSTRALIAN CAPITAL TERRITORY    )
  )

COURT OF APPEAL  )

ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN:DANIEL TERRENCE LESLIE SCHMIDT

Appellant

AND:MATTHEW GEOFFREY BOX

Respondent

Judges:  Gray P, Penfold and Rares JJ
Date:  5 November 2010 
Place:  Canberra

REASONS FOR JUDGMENT

PENFOLD J:

1. Subject to the following comments, my reasons for upholding the appeal were the same as those of Gray P and Rares J.

1. In order to make out the charges in this case, the prosecution needed to prove two things, namely that fraudulent refunds had been processed and that it was the appellant who had processed them.

1. Perhaps because investigations began as a result of a complaint about the appellant, rather than the discovery of any financial irregularities, the investigation and the prosecution seem to have focussed not on proving the fraudulent refunds but on proving that it was the appellant who had dealt with them. Although I cannot say whether this was an issue in this case, I note that there are risks inherent in looking for evidence to support a hypothesis rather than evidence to show what has really happened.

1. Whether for this or some other reason, the prosecution offered no evidence to establish in the abstract that false refunds had been processed.  In particular, there was no evidence of stock discrepancies suggesting that refunds had been processed without stock being returned, nor any evidence of cash being removed from the cash register other than in normal circumstances (being, apparently, customer transactions or transfers of cash to the store’s cash office).

1. Thus, the prosecution case depended entirely on circumstantial evidence suggesting that several identified refunds were suspect, and that the appellant was the common thread in those suspect refunds. It is not even clear whether the investigation involved any checks of refunds apparently processed by other cash register operators during the relevant period which, given the gaps in the system noted at [12] to [14] above, may also have revealed irregularities.

1. Gray P and Rares J describe in some detail the processes involved in the reconciliation of the CCTV footage and the cash register transactions record. On the basis of the CCTV footage shown to the Court of Appeal, I was not convinced that the reconciliation itself was reliable. In particular, I was concerned by the indication in some of Mr Hunter’s evidence that he had matched up the images on the CCTV footage and the transactions in the cash register records using question-begging reasoning.

1. For instance, Mr Hunter gave the following evidence:

THE WITNESS: On the CCTV footage shown it’s dated 19 March ’07 and the time is 18.20.19. You will observe on the video footage there is a male staff member, the defendant, and a female customer, approximately 45 years old, cardigan, dark slacks, this lady is purchasing of [sic] Rawsons Semillon Chardonnay. And this is the transaction prior to the transaction mentioned in charge 9926.

MR ROMANO: Well, your Honour, if the witness will produce some evidence that will show that to your Honour's satisfaction that’s what’s taking place because at the moment what you see there doesn’t - what he has said doesn’t collate with what [you] can see.

HIS HONOUR: Now how do you tell me that the woman bought a bottle of Rawsons Chardonnay? -- Again, based on the electronic journal information and the transaction number. The time on the electronic transaction is the same in this case because this was preceding the daylight saving change on 19 March.

Yes? -- That’s why it ties up, your Honour.

1. That is, once it was pointed out to Mr Hunter that the CCTV footage was not sufficient to identify what was being bought, he explained that he could tell what was being bought by reference to the cash register record and, apparently, the time match.  However, the vital link between the cash register record and the transaction shown on the CCTV footage, in particular that time matching, could only be made if the CCTV footage itself allowed the transaction to be identified as involving the same goods as shown on the cash register record. Instead, Mr Hunter’s evidence suggested that he was relying on the cash register records to satisfy himself of what was going on in the CCTV footage.

1. Apart from the CCTV footage, the other matter giving rise to suspicion about the legitimacy of the appellant’s transactions was that refund transactions were required to be authorised by a supervisor who had to enter a unique PIN into the cash register, and all the suspect transactions showed authorisations from supervisors who were not on duty at the time the refunds were processed.  The supervisors concerned gave evidence that they had not given their PINs to anyone else and that it would have been against company policy to do so.  The prosecution said that it was not required to show how the appellant had got hold of the PINs of the several supervisors, that the use of the supervisors’ PINs showed that the system could be manipulated, and that the fact that the transactions relying on those PINs were also electronically identified as having involved the appellant was sufficient evidence that it was the appellant who had manipulated the system by using the supervisors’ PINs without authorisation.

1. However, this evidence, like the evidence about the need to scan returned goods in order to process a refund, seemed to me to be two-edged. If there was scope for the appellant to enter someone else’s PIN into the cash register, there might also have been scope for someone else to have entered the appellant’s identifying details into the cash register. This possibility was not excluded by any evidence. Once it was accepted that the system could be manipulated by a person without proper authorisation, the evidence suggesting that the person who did so was the appellant rather than anyone else was limited; it consisted largely or entirely of the reconciliation of the CCTV footage and the cash register transactions which, as already indicated, was not in my view reliable.

1. It is of course possible that all the deficiencies in evidence that have been noted by this Court could have been overcome by more rigorous attention to the initial presentation of the case in the Magistrates Court. However, that was not done, and accordingly the convictions cannot be allowed to stand.

   I certify that the preceding twenty (20) to thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of her Honour Justice Penfold.

   Associate:

   Date:      5 November 2010

Counsel for the Appellant:  Mr S Gill
Solicitor for the Appellant:  Kamy Saeedi Lawyers
Counsel for the Respondent:  Mr A Doig
Solicitor for the Respondent:  ACT Director of Public Prosecutions
Date of hearing:  1 November 2010 
Date of judgment:  5 November 2010