Glanville v Harris
[2017] ACTSC 110
•10 May 2017
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Glanville v Harris |
Citation: | [2017] ACTSC 110 |
Hearing Date: | 8 October 2015 |
DecisionDate: | 10 May 2017 |
Before: | Refshauge J |
Decision: | 1. The appeal be dismissed. 2. The findings of guilt of each offence the subject of the Magistrates Court proceedings be confirmed. 3. The proceedings be remitted to the Magistrates Court for sentence. |
Catchwords: | APPEAL – CRIMINAL LAW – Appeal from Magistrates Court – appeal against findings of guilt – appeal that findings of guilt were unsafe and unsatisfactory – theft – appropriation of property – false accounting – elements of the offence of theft – reckless – “accounting document” – intention to permanently deprive – s 350 of the Criminal Code Act 2002 (ACT) TRUSTS – DISCRETIONARY TRUSTS – Powers of the trustee – consent – “right to enforce the trust” – in personam right – chose in action – intention to defeat the trust – reckless as to the intent to defeat the trust – intention to permanently deprive – transactions had no relationship to the object of the trust – |
Legislation Cited: | Crimes Act 1900 (ACT), s 86 Crimes Act 1958 (Vic), s 73(12), 73(13) Court Procedures Rules 2006 (ACT), rr 2903 Criminal Code 2002 (ACT), ss 20(2), 20(3), 20(4), 22, 300, 302, 304, 304(1), 305(2), 306, 306(1), 306(1)(b), 306(2), 306(3), 308, 350, 350(2), 350(2)(1)(a)(i) |
Cases Cited: | Adamson v O’Brien [2008] NTSC 8; 22 NTLR 84 Allgemeine Versicherungs-Gesellschaft Helvetia v Administrator of German Property [1931] 1 KB 672 |
Texts Cited: | ACT Magistrates Court, Practice Direction No 1 of 2009, “Case Management Hearings and Committal Hearings” Justice Arthur Emmett, “Practical Litigation in the Federal Court of Australia; Affidavits” (2000) 20 Australian Bar Review 28 Model Criminal Code Officers Committee, Final Report: Chapter 3, Theft, Fraud, Bribery and Related Offences (MCCOC, Canberra 1995) JD Heydon QC and Justice Mark Leeming, Jacobs’ Law of Trusts in Australia (LexisNexis Butterworths, 8th ed, 2016) Darrell Barnett, “The nature of a beneficiary’s interest in the assets of an express trust” (2004) 10 Australian Property Law Journal 169 Dr A T H Smith, Property Offences (Sweet & Maxwell, 1994) |
Parties: | Luke Robert Glanville (Appellant) Michael David Harris (Respondent) |
Representation: | Counsel Mr J Lawton (Appellant) Ms S McFarland (Respondent) |
| Solicitors Kamy Saeedi Law (Appellant) ACT Director of Public Prosecutions (Respondent) | |
File Number: | SCA 15 of 2015 |
Decision under appeal: | Court/Tribunal: ACT Magistrates Court Before: Magistrate Cook Date of Decision: 4 February 2015 Case Title: Harris v Glanville Court File Numbers: CC 2012/5413-23; CC 2012/5425-34 |
REFSHAUGE J:
It is well-known that the position of trustee carries with it fiduciary obligations which will be enforced by the courts. Breaches of such obligations can result in trustees being required to pay damages. See, for example, Commonwealth of Australia v Davis Samuel Pty Ltd (No 7) [2013] ACTSC 146; 282 FLR 1 at 321; [2320].
The question of whether a defaulting trustee can be criminally liable for breaches of such obligations is less well-known and somewhat complex. These proceedings raise some of those issues.
On 4 February 2015, the appellant, Luke Robert Glanville, was found guilty of 20 counts of theft while he was the controlling mind of a company that acted as trustee and one count of false accounting. He has not been sentenced for these offences. He was acquitted of one count of passing a valueless cheque.
On 27 February 2015, he appealed against the findings of guilt. While no sentence has been imposed, Mr Glanville is still entitled to appeal against the Court’s findings which, for the purposes of the appeal provisions of the Magistrates Court Act 1930 (ACT), constitute a conviction, as was so held by the Full Court in Parkinson v Alexander [2016] ACTSCFC 1; 11 ACTLR 190.
Jurisdiction
I explained the jurisdiction of this Court to hear and determine such an appeal in Preston v Carnall [2015] ACTSC 325; 300 FLR 302 at 303-4; [3]-[6], as follows:
3. This Court has jurisdiction under Pt 3.10 of the Magistrates Court Act 1930 (ACT). An appeal against a conviction for a summary offence may be brought to this Court under s 208(1)(b) of that Act and Div 3.10.2 regulates the conduct of the appeal.
4. An appeal under this provision is a rehearing on the evidence before the Magistrate with any other evidence that this Court permits to be adduced: Lukatela v Birch (2008) 223 FLR 1 at [17]- [24].
5. I summarised the position in Peverill v Crampton [2010] ACTSC 79 at [24] where I said:
Such an appeal is by way of rehearing. On the authorities, the principles under which such appeals are heard seem to be as follows:
1. The appellate court must determine whether the decision of the Magistrates Court is wrong, because it has fallen into error of law, by making a finding of fact which is clearly wrong, or exercising a discretion on a wrong principle or in a way that is clearly wrong.
2. The hearing is conducted on the evidence before the Magistrates Court with any evidence that is properly admitted on the appeal.
3. The appellate court must conduct a real and independent review of the evidence at the trial and the learned Magistrate’s reasons, including weighing conflicting evidence and drawing inferences itself from primary facts found by the Magistrates Court.
4. The appellate court must, however, make due allowance for the advantage that the learned Magistrate has in having seen and heard the witnesses.
5. The appellate court is not restricted to making the decision which the Magistrates Court should have made but must have regard to the circumstances existing at the time of the appeal and make its own decision in the circumstances and decide the matter on the law as at the date of the appeal.
6. In general, the appellate court will not interfere with the decision of the Magistrate unless it has caused a miscarriage of justice.
7. The appellate court should determine the correct judgment for itself and only order a retrial if it cannot.
6. Further, under s 216 of the Magistrates Court Act, the filing of a Notice of Appeal stays the execution or the enforcement of the order or decision that is the subject of the appeal. That may, in appropriate cases, need to be considered in the disposition of the appeal.
These are the principles that I shall apply.
In this case, however, because Mr Glanville has not been sentenced, no issue is raised under s 216 of the Magistrates Court Act.
The proceedings
The proceedings have an unfortunate history. The offences the subject of these charges were alleged to have been committed between July and December 2008. Mr Glanville was originally charged with the offences by summonses laid on 27 June 2012 and returnable before the Court on 27 July 2012.
He entered a plea of not guilty on his first appearance in Court. After a number of adjournments, the matters were, on 11 April 2013, listed for a Case Management Hearing (see ACT Magistrates Court, Practice Direction No 1 of 2009, “Case Management Hearings and Committal Hearings”, since revoked on 18 December 2014) and for hearing on 11 November 2013. The proceedings were, however, adjourned on the day of the hearing and then a number of times until they were finally heard on 12 to 15 May 2014.
It was, however, not until 4 February 2015 that the findings of guilt were made.
The appeal to this Court was commenced within the statutory period permitted and, after some delay occasioned by the complexity of the matter, which was said to require Mr Glanville to seek counsel’s advice, listed for hearing on 8 October 2015.
It was heard by me on that day. Regrettably, I then contributed to the delay. In part, that was because I was incapacitated for some months in late 2015 and early 2016 and, by the time I returned to duty, the pressures of the business of the Court delayed completion of these reasons.
So far as I was responsible for this further delay, I express my regret and apologise to the parties.
As to the conduct of the proceedings, I should mention one matter that arose in the hearing in the Magistrates Court. The prosecutor sought to tender an affidavit made by Mr Glanville as an admission.
The affidavit had been filed in civil proceedings that Innuendo Advertising Pty Ltd had taken against Mr Glanville. It appears that default judgment was entered against Mr Glanville, but he applied to be let in to defend. As generally required, his application was supported by an affidavit that was made by him: Evans v Bartlam [1937] AC 473 at 480, 489.
The use of an affidavit from other court proceedings is not like a statement that is not made for the purpose of curial proceedings; there are rules about the use of such a document in proceedings that are not those for which it was made and of which rules neither counsel nor the learned Magistrate seemed to be aware. An affidavit, like documents produced on discovery, is subject to the implied undertaking that it will not be used, except for the proceedings in which the document is produced or the affidavit is filed, without leave of the Court before which those proceedings have been taken. So much was decided by the High Court in Hearne v Street [2008] HCA 36; 235 CLR 125 at 154-5; [96]. The Court further held at 160-2; [109]-[112], that the undertaking binds anyone who knows the origin of the material.
Of course, once the affidavit has been read in the proceedings in which it is filed, it is, subject to any order striking out any paragraph of it or an order that it not be published, available for the public to read. See r 2903 of the Court Procedures Rules 2006 (ACT); Justice Arthur Emmett, “Practical Litigation in the Federal Court of Australia; Affidavits” (2000) 20 Australian Bar Review 28 at 38. The prosecutor did not assert that the affidavit had been read, a necessary pre-condition for its use unless leave of the Court in which it was filed had been given. From the transcript of the hearing, there was, in fact, some uncertainty about whether it had been read. Without that pre-condition being fulfilled, the affidavit should not have been read.
In any event, the learned Magistrate declined, under s 137 of the Evidence Act 2011 (ACT), to permit the affidavit to be used in the proceedings, although the
pre-conditions for its use had not been established.
The facts
In broad terms, the facts founding the charges were not in dispute, though there were serious challenges to the inferences that were permissibly to be drawn from those facts. The evidence in the Magistrates Court was, in fact, almost entirely given by the unopposed admission of unchallenged written statements made to police.
Some of the facts were not easy to understand, but I make the following findings.
Mr Glanville is a qualified accountant who was, in 2008, conducting his own accounting business through a company, Achilleus Accounting Pty Ltd, using several business names. It conducted its business through a trust, originally called the Achilleus Accounting Trust and later the Achilleus Taxation Trust (the Achilleus Trust).
Pulp Advertising and Publishing Pty Ltd was a company apparently providing advertising services. Its director was William Miller and it contracted James Gourley to provide management services to it.
In early 2008, Mr Miller separated from his wife. He was concerned about his business affairs becoming involved with any consequent proceedings relating to the divorce.
As a result, he considered establishing a trust through which to conduct his business, and which, he thought, may provide the protection he sought.
He discussed the matter with Mr Gourley who had had a trust established for him by Mr Glanville. Mr Glanville also had, earlier, expressed an interest in providing accounting services for Pulp Advertising and Publishing Pty Ltd, but, at the time, it had an accountant and Mr Miller was not interested in any change.
Mr Gourley recommended that Mr Miller consult Mr Glanville about establishing a trust for the purpose of his divorce proceedings. He did so. Mr Glanville agreed to act and to establish a trust with a corporate trustee.
On 13 June 2008, Innuendo Advertising Pty Ltd was incorporated. It, too, was an advertising company. On the same day, the Innuendo Advertising Trust (the Trust) was established; Mr Gourley was the Settlor, Mr Miller the only Specified Beneficiary and Innuendo Advertising Pty Ltd the Trustee.
It was not entirely clear on the evidence how the business was conducted between the entities. It appeared that Pulp Advertising and Publishing Pty Ltd continued to conduct an advertising business concurrently with Innuendo Advertising Pty Ltd. Its business, however, was purchased by Innuendo Advertising Pty Ltd after about a year and, in September 2009, Pulp Advertising and Publishing Pty Ltd was placed into liquidation. It appears that the purchase may have been made by Innuendo Advertising Pty Ltd as trustee of the Trust.
Mr Miller said that Innuendo Advertising Pty Ltd had no staff as Pulp Advertising and Publishing Pty Ltd was “essentially ... the ‘running company’”. It is not at all clear what that actually meant.
According to the evidence, fees from clients for whom work was done, principally the Birkenhead Point Shopping Centre, would pay invoiced amounts into the Trust’s bank account. It is not clear why that would be so, since the work was apparently performed by Pulp Advertising and Publishing Pty Ltd, at least until its business was sold to the Trust. I do not need to unravel these complexities.
Mr Miller’s evidence was that the only monies that were to be paid out of the Trust’s bank accounts were for payment of invoices received from suppliers (who, curiously, were, presumably, providing services to Pulp Advertising and Publishing Pty Ltd) and, when requested by Mr Miller, payment for his rent. The fees charged by the Achilleus Trust could also be paid out of the account.
There was no challenge to this evidence and no evidence to suggest any other arrangement.
Mr Glanville was the sole director of Innuendo Advertising Pty Ltd and, as such, had control through it of the Trust.
The Trust
The Trust was a relatively standard discretionary trust, though with only one Specified Beneficiary, Mr Miller. The general Beneficiaries included Mr Miller, his specified relatives, certain entities in which a beneficiary had a specified interest and any charity.
Mr Gourley, as well as being the Settlor, was named as the Guardian, being a person whom the Trustee may consult about certain decisions and who, in respect of certain provisions, termed the “reserved powers”, was required to be consulted by the Trustee.
Other relevant terms of the Trust are set out in the following paragraphs:
The Trustee had power under clause 3 to determine how to deal with the net income of the Trust, including:
3.1.1 to pay apply or set aside the same to or for any one or more of the General Beneficiaries living or in existence at the time of the determination provided that any payment application or setting aside in favour of a General Beneficiary described in clause 1.11.3 hereof shall on the first occasion on which a payment application or setting aside is made to or for that General beneficiary be subject to clause 11 hereof;
3.1.2 to accumulate the same;
The Trustee, under sub-clause 3.2.5, had an absolute discretion in the making of any such determination without being required to assign a reason and under
sub-clause 3.2.7, might do so orally or in writing.
The Trustee had a wide power to make advances and payments to beneficiaries of capital of the Trust as the following sub-clauses make clear:
6. The Trustee may in lieu of the powers conferred under the Maintenance, Accumulation & Advancement Trustee Provisions (which powers shall not apply to this trust):
6.1subject to clause 11 hereof at any time or times and from time to time before the Vesting Day convey or transfer the whole or any part of the Trust Fund (in specie or kind or otherwise in such manner as the Trustee in the Trustee’s absolute discretion shall determine) or out of the capital of the Trust Fund but not out of any moneys referred to in sub-clause 6.5 pay any sum or sums (either in addition to or in substitution for any share of income) to any beneficiary for his own use and benefit absolutely or apply the same to or for the maintenance education advancement or benefit of such beneficiary in such manner as the Trustee shall think fit and for that purpose may raise any such sum or sums out of the said capital in such manner as the trustee shall think fit;
6.2subject to clause 11 hereof at any time or times and from time to time before the Vesting Day lend any sum to any beneficiary either with or without security and upon such terms and conditions as to repayment and with or without interest as the Trustee shall think fit;
6.3subject to clause 11 hereof at any time or times and from time to time pay or apply to or for the benefit of any beneficiary the whole or any part of the capital or income or accrued or accumulated income to which he is either absolutely or contingently entitled (and notwithstanding that his interest is liable to be defeated or diminished by the exercise of any power of appointment or revocation or by reason of any other matters or circumstance) in such manner and subject to such terms and conditions as the Trustee shall think fit and without limiting the generality of the foregoing for the maintenance education advancement or benefit of such beneficiary;
The Trustee was given a wide power of investment as the following sub-clauses makes plain:
7. The Trustee shall in addition to the powers otherwise conferred upon trustees by law have the following powers:
7.1to apply and invest all moneys at any time forming part of the Trust Fund in any such investments whether involving liabilities or not or upon personal credit with or without security and upon such terms and conditions s the Trustee shall in its absolute discretion think fit and to the intent that the Trustee shall have the same powers in all respects as if it were the absolute owner beneficially entitled ... [with a non-exclusive list of such investments].
7.2to make a purchase any such investments for cash or in consideration of an annuity or otherwise and upon such terms and conditions as the Trustee shall in the Trustee’s absolute discretion think fit and to make or purchase any such investment for a sum greater than the amount of the Trust Fund for the time being and to agree to pay for any such investment wholly or in part from any future moneys which may come into the Trustee’s hands including dividends profits interest and other income paid or payable in respect of any such investment;
7.3to advance and lend moneys to and to borrow and raise moneys from any person whatsoever (including any beneficiary or Trustee) with or without security and on such terms and conditions as the Trustee shall think fit and to secure by mortgage bill of sale assignment transfer conveyance lien pawn pledge deposit of deeds charge fixed or floating legal or equitable of over or in respect of any property, right title interest or estate whatsoever or otherwise howsoever the borrowing or raising of money by the Trustee and the payment of any money to or by any persons firms companies governmental or municipal bodies upon such terms with or without security or interest as the Trustee shall deem fit ... [with a non-exclusive list of methods of so investing]
(Emphasis added)
Mr Glanville placed particular reliance on the italicised part of sub-clause 7.3. The powers also included the following:
7.9to pay out of the Trust Fund or the income thereof all costs charges and expenses incidental to the management of the Trust Fund or to the exercise of any power authority or discretion herein contained or in carrying out or performing the trusts hereof which the Trustee may at any time incur including all income tax or other taxes payable in respect of the Trust Fund costs in any way connected with the preparation and execution of these presents and all moneys which the Trustee may be required to pay as settlement gift probate estate stamp or revenue duties in respect of the Trust Fund or on this Deed;
...
7.15to employ any person (including any Trustee hereof and any director of a Company being the Trustee but not the Settlor) in connection with any trade or business carried on by the Trustee or in connection with anything required to be done pursuant to the provisions hereof including the receipt and payment of money and to decide the remuneration to be allowed and paid and the amount of all charges and expenses and to create or arrange any scheme of superannuation retirement benefit or pension for the benefit of any person so employed;
...
7.31to deal with, manage, transpose and realise any investments and all property constituting the Trust Fund or any property comprised in any security as the Trustee thinks fit in all respects as if the Trustee was the absolute and beneficial owner of the Trust Fund AND the Trustee shall not be accountable in any way whatsoever for any loss arising out of the making of any investment or out of the failure to realise any investment or out of the management of any investment.
...
7.35to purchase, lease, exchange or otherwise acquire or take possession of any real or personal property or any rights or privileges and in particular any land, buildings, easements, machinery, plant, equipment, or stock in trade form any person upon such terms and conditions as the Trustee in the Trustee’s absolute discretion shall think fit.
(Emphasis included)
The usual powers to employ professional assistance and remunerate such professionals and the Trustee were also included in the following clauses:
13. PROFESSIONAL REMUNERATION
Subject to clause 27 hereof any Trustee hereof who may be a Solicitor or accountant or any firm of which he may be a member shall be entitled to make all usual and proper charges for both his professional and other services in the administration of the trusts hereof and for his time and trouble that he would have been entitled to make it not the Trustee and so employed.
14.TRUSTEE’S REMUNERATION
Subject to clause 27 hereof the Trustee hereunder may from time to time charge and retain out of the Trust Fund such Trustee’s commission as is reasonable.
Clause 27 excluded the Settlor from any remuneration payable under clause 14.
The Operation of the Trust
Mr Miller agreed with Mr Glanville that Achilleus Accounting Pty Ltd, though presumably as trustee for the Achilleus Trust, would administer the Trust. The letter of engagement, which was in evidence, simply referred to “Achilleus Accounting” and so it was unclear whether the Trust, the other contracting party, was contracting with the Trust or Achilleus Accounting Pty Ltd in its own right. It seems likely it was the Trust.
The services to be provided were said to be attending to all banking requirements, collecting all mail and preparing outgoing mail, attending to telephone, email and other secretarial duties, attending to data input for the Mind Your Own Business (MYOB) accounting software and reconciling the bank accounts advertising on a monthly basis, collating expense invoices and paying creditors, and processing payroll requirements, including superannuation. The agreement provided that Mr Glanville’s company would be paid $990 per month for these services.
On 19 June 2008, Mr Glanville was requested to open a bank account for the Trust, which he did with St George Bank Ltd (the Trust’s Account) and, on 27 June 2008, $10 549.96 was deposited into it, being fees paid by the Birkenhead Point Shopping Centre, the main client of the advertising business.
Mr Glanville was the only signatory to the Trust’s Account; neither Mr Miller nor Mr Gourley were signatories, nor was Simon Tory, the Account Manager for the advertising business, even though he was the main conduit for communications to Mr Glanville about the financial affairs of the business. None of these three had any direct access to the bank account, including through internet or telephone banking facilities. None of the three received bank statements, either electronically or in paper form. Thus, it was accepted, Mr Glanville was the only person who could operate on the Trust’s Account.
It was expressly conceded at the hearing in the Magistrates Court that Mr Glanville was the only person who operated the Trust’s Account which he opened for the Trust.
The Charges
Between 27 June and 27 December 2008, Mr Glanville operated the Trust’s Account. Achilleus Accounting Pty Ltd, as trustee of the Achilleus Trust, also operated a bank account to which I will refer as the “Achilleus Trust Account”. That latter account, opened on 31 May 2008, was closed on 2 July 2009. Mr Glanville was the only person who could conduct transactions on the Achilleus Trust Account.
Certain transactions on these accounts were the subject of the charges preferred against Mr Glanville by police. In some instances, it was important not only to identify the primary transaction the subject of the charge but also related transactions. I shall note in relation to the charges the charge number allocated to them in the Magistrates Court.
From the evidence admitted, I am able to accept the following evidence.
Charges No CC2012/5414 to CC2012/5423 and CC2012/5425 to CC2012/5433 were charges for the offence of theft contrary to s 308 of the Criminal Code 2002 (ACT). Charge No CC2012/5434 was for an offence of false accounting contrary to s 350(2) of the Criminal Code.
The thefts were said to have been constituted by internet or telephone banking transfers from the Trust’s Account to other accounts or by cash withdrawals. In the case of internet banking transfers, there is provision for a notation or explanation of the purposes of the transfer or other reference, which appears on either or both of the account from which or to which the transfer is made. I shall refer to these notations as the “internet reference”.
The charges and a summary of the evidence in support of them was as follows:
1. Charge No CC2012/5413. On 8 July 2008, Mr Glanville transferred $3000 from the Trust’s Account into the Achilleus Trust Account. Prior to the transfer, the Achilleus Trust Account had a balance of $218.10. Later the same day, Mr Glanville transferred $2777.70, the payment of all but $1.00 of an account to MYOB owed by Achilleus Accounting Pty Ltd, in payment of that invoice from the Achilleus Trust Account.
2. Charge No CC2012/5414. On 16 July 2008, Mr Glanville transferred a further $3000 from the Trust’s Account to the Achilleus Trust Account. At the time of the transfer, the balance in the Achilleus Trust Account was $778.30. The internet reference for the transfer was “achilleus transfer”. One minute after the transfer, Mr Glanville transferred $3024.17 from the Achilleus Trust Account into a Commonwealth Bank of Australia account in the name of Steven Peachey. Mr Peachey was an employee of Achilleus Accounting Pty Ltd as trustee for the Achilleus Trust. A reference note recorded in the account for the transaction stated “achilleus wages – steve”.
3. Charge No CC2012/5415. On 28 July 2008, Mr Glanville transferred $4000 from the Trust’s Account into another account with St George Bank Ltd in the name of Luke Robert Glanville. The internet reference for the transaction was “achilleus transfer”. Prior to the transfer, that account, which had been opened in 2001, and to which I will refer as “Mr Glanville’s St George Account”, had a balance of $29.03. Later that day, $4100 was withdrawn from the account, leaving a small overdrawn balance of $70.79.
4. Charge No CC2012/5416. On 8 August 2008, Mr Glanville transferred $800 from the Trust’s Account to the Achilleus Trust Account, recorded by internet reference “achilleus transfer”. The balance of the Achilleus Trust Account prior to the transfer was $836.35. Later on that day, two cheques were cashed: one for $601.77 and the other for $608.38, drawn on the Achilleus Trust Account and shown in the cheque book as wages for two employees of Achilleus Accounting Pty Ltd. The two cheques were payable to two employees of Achilleus Accounting Pty Ltd as trustee for the Achilleus Trust. Still later, Mr Glanville transferred $1027.95 to the Bank of Queensland, which amount was one of the regular monthly payments payable by Mr Glanville in respect of the financing of the purchase of a black 2006 Mitsubishi Evo 9 sedan driven by Mr Glanville. That payment was, however, not then processed because the cashed cheques had resulted in a balance of account of only $426.20.
5. Charge No CC2012/5417. On 15 August 2008, Mr Glanville transferred $3000 from the Trust’s Account to Mr Glanville’s St George Account. The internet reference was “Bill Miller’s Loan Account”, though the money was never transferred to any account to which Mr Miller had access. Later that day, a number of withdrawals were made from the latter account: an amount of $1000 was withdrawn from an Automatic Teller Machine (ATM), a number of payments through the Electronic Funds Transfer at Point of Sale (EFTPOS) system were made for $50.10, $23.40, $260 and $96.95 and an automatic transfer of $487.84 was made to a loan account in the name of Luke Glanville which had exceeded its credit limit by $319.19. A transfer of $150.88 was also made to “Clickthru”
6. Charge No CC2012/5418. On 18 August 2008, Mr Glanville transferred $3000 from the Trust’s Account to the Achilleus Trust Account, the internet reference was “achilleus transfer”. At approximately the same time, Mr Glanville transferred the sum of $3024.17 to Mr Peachey’s account with the Commonwealth Bank of Australia with the internet reference of “achilleus wages – steve”.
7. Charge No CC2012/5419. On 25 August 2008, Mr Glanville transferred $3000 from the Trust’s Account to Mr Glanville’s St George Account, with the internet reference of “Savings Transfer”. Immediately prior to the transaction, Mr Glanville’s St George Account had a balance of $271.57. Later that day, amounts were withdrawn from Mr Glanville’s St George Account, initially for a taxi fare in Sydney and followed by purchases at various retail outlets in Sydney, including from David Jones Ltd and from Louis Vuitton Australia Pty Ltd for $875. A receipt for this latter amount in the form of a sales memo was discovered at Mr Glanville’s home, for a Speedy 25 Danver Ajar handbag, when a search warrant was executed on the premises.
8. Charge No CC2012/5420. On 25 August 2008, Mr Glanville transferred $3100 from the Trust’s Account to Mr Glanville’s St George Account with an internet reference of “Savings Transfer”. A minute later, $3258.90 was transferred out of the latter account to the Commonwealth Bank of Australia account of Peter Blackshaw Real Estate, Dickson office, with a reference explanation of “5206-55 Vasey Cres”. From 16 February 2007, to 25 February 2009, Mr Glanville was renting premises at Unit 2, 55 Vasey Crescent, Campbell and $3258.90 was the monthly rental for the premises at August 2008.
9. Charge No CC2012/5421. On 28 August 2008, Mr Glanville transferred $3000 from the Trust’s Account to Mr Glanville’s St George Account for which the internet reference was, “Bill Miller Disbursement”. Mr Glanville had been given an authorisation to transfer this sum to Mr Miller’s personal account also with St George Bank Ltd. One minute later, however, $1600 only was transferred from Mr Glanville’s St George Account to Mr Miller’s personal account. The $1400 was never transferred to the latter account.
10. Charge No CC 2012/5422. On 28 August 2008, only two hours later, Mr Glanville transferred $1500 from the Trust’s Account to Mr Glanville’s St George Account with a reference note of “Bill Miller – Loan”. Two minutes later, it was transferred to the Achilleus Trust Account, the internet reference being “achilleus transfer”. A few minutes later two transfers were made from the Achilleus Trust Account of $623.77 and $630.38 to the bank accounts of two employees of Achilleus Accounting Pty Ltd as trustee for the Achilleus Trust and recorded in the internet reference as “achilleus wages”.
11. Charge No CC 2012/5423. On 3 September 2008, Mr Glanville transferred $3000 from the Trust’s Account to Mr Glanville’s St George Account. A minute later, he transferred that amount to the Achilleus Trust Account, for which the internet reference was “achilleus transfer”. A minute later still he transferred $3267 to a bank account of the Australian and New Zealand Banking Group Ltd in the name of Keith Snell. The internet reference was “March Rent Payment” and the amount was equal to the rent payable for Unit 28, 37 Wentworth Avenue, Kingston, ACT, owned by Mr Snell and rented by Mr Glanville as the offices of Achilleus Accounting Pty Ltd.
12. Charge No CC 2012/5425. On 5 September 2008, Mr Glanville transferred $3000 from the Trust’s Account to Mr Glanville’s St George Account, which the internet reference recorded as “Bill Miller – Loan”. Immediately prior to the transfer, the balance in the latter account was $416.43. Four minutes later, Mr Glanville transferred $1667.47 to a National Australia Bank Ltd account in the name of Sydney Dyna Tuning Silverwater Automotive Services. This was, as an invoice also discovered at Mr Glanville’s home during the execution of a search warrant showed, payment for mechanical work on the Mitsubishi Evo 9 sedan mentioned in the evidence for the fourth charge referred to above. Later that day, an EFTPOS transaction in the amount of $750 from the account was made for the purchase from Adrenalin Plus Boardstone of a Burton Custom X snowboard which was later found at Mr Glanville’s house.
13. Charge No CC2012/5426. On 5 September 2008, Mr Glanville transferred $3000 from the Trust’s Account to Mr Glanville’s St George Account by telephone banking. Immediately prior to the transfer, this latter account had a balance of funds of $998.98. About half-an-hour later, Mr Glanville withdrew $2000 in cash at a St George Bank ATM in the City.
14. Charge No CC2012/5427. On 17 September 2008, Mr Glanville transferred $1650 from the Trust’s Account to the Achilleus Trust Account for which the internet reference was “achilleus invoice 558”. An invoice from the Achilleus Trust with this number and for this amount has not been located and was not received by Innuendo Advertising Pty Ltd into its records. It was not an amount payable under the terms of the contract with the Trust. About a minute later, $3921 was transferred from the Achilleus Trust Account to Mr Peachey’s Commonwealth Bank of Australia account referred to in connection with the second charge above, with the internet reference being “achilleus wages”.
15. Charge No CC2012/5428. On 17 October 2008, Mr Glanville transferred $2500 from the Trust’s Account to Mr Glanville’s St George Account, which was then in debit. The internet reference was “Bill Miller – Loan”, though these funds were never transferred into an account to which Mr Miller had access. The debit had arisen because, before the transfer had been credited to Mr Glanville’s St George Account, he had made some purchases using the account’s EFTPOS facility and a withdrawal of $2000 through an ATM.
16. Charge No CC2012/5429. On 18 October 2008, Mr Glanville transferred $1000 from the Trust’s Account to Mr Glanville’s St George Account by telephone transfer. Immediately prior to the transfer, Mr Glanville’s St George Account was overdrawn. A minute later, a purchase was made using an EFTPOS facility, withdrawing $110 from Mr Glanville’s St George Account paid to a company, Savannah Pty Ltd.
17. Charge No CC2012/5430. At some stage, Mr Glanville opened a further account in his own name at St George Bank Ltd, to which I shall refer as “Mr Glanville’s second St George Account”. On 18 October 2008, Mr Glanville transferred $2500 from the Trust’s Account into Mr Glanville’s second St George Account with a reference note “Bill Miller – Loan”. Again, these funds were never transferred into an account to which Mr Miller had access. A minute later, Mr Glanville transferred $3258.90 from Mr Glanville’s second St George Account to the Commonwealth Bank of Australia account in the name of Peter Blackshaw Real Estate Trust. The internet reference was “5206 – 55 Vasey Crescent” an identical transaction to the eighth charge above.
18. Charge No CC2012/5431. On 24 October 2008, Mr Glanville transferred $300 from the Trust’s Account to Mr Glanville’s second St George Account with the internet reference “achilleus disbursement”.
19. Charge No CC2012/5432. On 4 December 2008, Mr Glanville transferred $120 from the Trust’s Account into the Achilleus Trust Account with the reference note of “achilleus transfer”.
20. Charge No CC2012/5433. On 18 December 2008, Mr Glanville closed the Trust’s Account and withdrew the credit balance of $6.01.
21. Charge No CC2012/5434. On 18 December 2008, Mr Glanville sent to Mr Gourley a Balance Sheet and Profit and Loss Account for the Trust. The documents show a balance in the Trust’s Account of $28,965.49 as at 17 December 2008. The account, however, had, at this time, a balance of $5.49.
Other relevant matters
The admitted evidence before the learned Magistrate shows certain other relevant matters. I set them out here.
As noted above (at [44]), it was agreed that Achilleus Accounting Pty Ltd as trustee for the Achilleus Trust, would be paid a monthly fee of $990 for administration of the Trust. An analysis of the Trust’s Account shows that this sum was paid to the company on 1 September 2008, 18 September 2008 and 24 October 2008.
A number of former employees of the Achilleus Trust, as well as creditors of the Achilleus Trust and of Mr Glanville, gave evidence that wages and debts, such as rent, were paid late by the Achilleus Trust.
An instructive series of transactions occurred in late July 2008. Mr Glanville was authorised and instructed to pay $10 000 from the Trust’s Account to one of the suppliers, Gillian Adams. Because of deposits that had been made to the Trust’s Account, there should have been sufficient funds to pay the account.
At the time, however, because of the withdrawals by Mr Glanville that constituted the third charge above, there were insufficient funds in the account, it then having a balance of $5863.25.
Mr Glanville made a transfer of $5000 to Ms Adams on 29 July 2008. On 2 August 2008, Mr Glanville transferred $5000 from the Achilleus Trust Account to the Trust’s Account and two minutes later transferred $5000 from the Trust’s Account to Ms Adams.
On 19 August 2008, Mr Glanville transferred $800 from the Achilleus Trust Account to the Trust’s Account, being the same amount that had been transferred into the Achilleus Trust Account on 8 August 2008, the subject of the fourth charge above.
On 26 August 2008, Mr Miller requested that Mr Tory arrange with Mr Glanville to transfer $3000 from the Trust’s Account into his personal account. Mr Tory contacted Mr Glanville by email, requesting the transfer to be made. On 27 August 2008, Mr Tory sent an email to Mr Glanville notifying that the transfer had not happened. Mr Glanville replied, stating that internet banking had been “down” that evening and he would transfer the funds, even though, which he did not mention, the Trust’s Account had a balance of only $76.81.
On 27 August 2008, the Birkenhead Point Shopping Centre deposited $28 703.13 into the Trust’s Account. On 28 August 2008, Mr Glanville transferred $3000 into Mr Glanville’s St George Account. The internet reference was “Bill Miller – loan”. He then, a minute later, transferred $1600 to Mr Miller’s personal account recording the internet reference as “Bill Miller disbursement”. He told Mr Tory that $1500 had been deposited.
Mr Tory next suggested that Mr Glanville might deposit cash to speed up the transfer. Mr Glanville agreed but asked for the bank details which was odd as he was supposed to have transferred money into the account already.
In any event, Mr Tory provided the bank details and asked for $3000 to be transferred. Mr Glanville then withdrew $1500 from the Trust’s Account through the branch at City Walk, Canberra City, ACT, and deposited it into Mr Miller’s personal account. He then emailed Mr Tory advising that $1500 was “in the a/c”.
The $1400, being the balance of the $3000 transferred into Mr Glanville’s St George Account, less the $1600 actually transferred to Mr Miller’s personal account is the subject of the ninth charge.
On 19 September 2008, Mr Glanville transferred $2000 from the Achilleus Trust Account to the Trust’s Account. Mr Glanville, however, had received instructions from Mr Tory to pay two invoices from a supplier, Patrick Jones for $3663 and $3520. Although the first was paid on 18 September 2008, there were insufficient funds to pay the second amount until the $2000 had been paid into the Trust’s Account. The second invoice was paid two minutes after the transfer of $2000 had been made.
In September or October 2008, Mr Glanville advised Mr Tory that he wanted to end the relationship. Mr Gourley’s evidence was as follows:
In either late September to early October 2008 Luke called me on my mobile telephone. I do not remember the exact date but I recall that I was driving home from work and I was on Taren Point Road in Taren Point, Sydney. Luke said words to the effect of:
I don’t won’t to continue being the director of Innuendo Advertising and I want Achilleus Accounting to stop providing services for the Trust.
Luke went on to say that he was finding Bill too hard to deal with and it was not worth his time anymore.
I discussed taking over Luke’s role as the director of Innuendo and I remember Luke insinuating that Bill was taking money out of the company and it would go broke. I got the clear impression that Luke was trying to discourage me from taking over the director role of Innuendo Advertising.
Following that telephone call, Luke and I had a number of telephone calls during which we discussed the handing over of the directorship of Innuendo to myself. We decided that a new Trust account should be opened, I cannot remember whether it was Luke or myself who first suggested creating a new account and why.
During this time I also discussed with Bill the conversations I had with Luke, Bill agreed that I should take over as the Innuendo director.
I had a number of further discussions with Luke over the telephone and requested that he provide me with all the documents, including Mind Your Own Business (MYOB) accounting files relating to the St. George Innuendo Trust account as well as the Bank Statements and a profit/loss sheets. We agreed that Luke would file the BAS form for the July-September 2008 period and I would take over the directorship in the new BAS period commencing 1 October 2008. Luke told me that he would get all the paperwork complete and provide it to me before the last lodgement date for the July – September BAS period. BAS’s have to be submitted by the 28th of the following month, so that would have made the date that Luke was going to have the paperwork to me to be 28 October 2008. I also requested that Luke transfer the balance of funds held in the St. George Innuendo Trust account to the new Innuendo Trust Account which Luke had set up at Westpac Bank. Luke later provided me copies of the Westpac account documents and I saw the account number was 212469 in the name of Innuendo Advertising Pty. Ltd.
Mr Gourley then detailed further complaints about the difficulties he was having in obtaining the relevant paperwork and that he found it increasingly difficult to make contact with Mr Glanville. He began sending emails frequently to Mr Glanville from early November 2008, but Mr Glanville provided some plausible excuses for the delay and nothing happened.
On 9 December 2008, Mr Glanville sent an email to Mr Gourley in which he said that all his paperwork had been posted to Mr Gourley and that “Bill’s money” had been transferred into the new account with Westpac Banking Corporation Ltd. That did not in fact happen, and when Mr Gourley tried to speak to Mr Glanville on the telephone repeatedly, he was unable to do so.
On 18 December 2008, Mr Glanville sent to Mr Gourley by email a copy of the Business Activity Statement (BAS) for the Trust for July-September 2008 and a Balance Sheet and Profit and Loss Statement for the Trust dated 17 December 2008, these being the subject of the 21st charge above. In the email, Mr Glanville stated that $11 384.57 was being deposited into the new account.
Mr Gourley checked the documents and realised that they were incorrect, with the income set out in the BAS being significantly more than that shown in the other accounts. He also checked with invoices to clients of the Trust. The total, according to the BAS was $91 130.00 whereas the other documents prepared by Mr Glanville showed $82 842.43.
By 22 December 2008, no funds had been paid into the new account. Mr Gourley tried to contact Mr Glanville, but his receptionist said he was not in the office.
Mr Gourley’s evidence continued:
On 24 December 2008 I received an email from Luke stating that Erin, who I knew to be the receptionist at Achilleus, did not make it to the bank in time on Friday and ‘it’ would be put in tomorrow. Attached to the email was a PDF file called ‘Innuendo Cheque’. This file appeared to be an electronic scan of a St George Bank cheque made out to ‘Innuendo Advertising – Westpac’ for $11384.69 and was dated 16 December 2008. I saw the cheque was from the St. George Innuendo Advertising Trust account and it was cheque number ‘000001’ from that account. I recognised the signature on the cheque to be Luke’s as I had seen his signature on a number of various documents through our business dealings.
I emailed Luke and asked for proof that the money had been transferred along with a number of other documents that I required, including proof that the BAS for July-September 2008 had actually been lodged with the Australian Taxation Office (ATO). Luke never let me know if the BAS had been lodged or not and I later found out from the ATO that Luke had never actually lodged that BAS. Luke did email me back a scan of a deposit slip suggesting that a deposit $11384.69 had been paid into Westpac account 212469.
In late December 2008 or early January 2009 I received a letter addressed to Innuendo Advertising Pty Ltd from Westpac Banking Corporation advising that a cheque for $11384.69 which had been deposited into account 212469 had been returned as unpaid. The cheque itself was with the letter. I saw that it was a St George Bank cheque and it was dated 16 December 2008. It was made out to Innuendo Advertising but the cheque was written from the account of ‘Achilleus Pty Limited the Achilleus Trust’ and it was cheque number ‘000112’.
I later realised that this cheque was different from the scan of the cheque that Luke emailed me on 24 December 2008. I do not know what happened to cheque number ‘000001’ from the St George Innuendo Advertising Trust Account, I have never seen that cheque or received any information that it has ever been presented.
Later, Mr Gourley obtained the bank statements for the Trust’s Account and identified 18 withdrawals from the account for which he could identify no legitimate reason even after discussing them with Mr Miller. These included all the transactions the subject of the above charges, except the transfer of $1500 on 28 August 2008, the subject of the 10th charge above, which he may have confused with the cash withdrawal of that amount that Mr Miller had authorised as noted above (at [64]). He made no mention of the final withdrawal on closing the account.
Mr Miller’s evidence was of similar difficulties that he experienced in contacting Mr Glanville to get the information needed about the affairs of the Trust. His evidence was as follows:
I think it was in December 2008, when I first decided to visit and speak to Luke face-to-face about the problems. I did not call him prior to attending, I just turned up at his business address in Canberra. I saw Luke go into the office and I followed him in. As I was going up the stairs the receptionist asked me if she could help me. I told her that I was fine and that I had just come to get my money from Luke as he had stolen it. Luke said; ‘let’s not discuss it in here, lets go outside.’ When we got outside I asked him ‘what’s going on, why have you done this? Why have you taken my money?’ He said: ‘I’ve explained it all to James’. I said: ‘It really doesn’t matter to me why you’ve taken it. You could have come and asked me. I want it back’. He told me that he would give it back. I said: ‘I want it back by Friday’. He said: ‘Ok’. I asked him if he promised that he would have it back by Friday and he said that he promised. I then drove back to Sydney.
The money did not go in by Friday as Luke had promised.
The second time I went to Canberra was the following week. I attended at his office again. I spoke to the receptionist. I said: ‘You know who I am, I’m here for my money, can you please contact Luke’. I waited outside the office. I think I was there for about two hours. I told the receptionist that she needed to make sure that Luke rang me when he got back to the office. I then drove back to Sydney. This was the same day I coincidentally bumped into a real estate agent outside of Luke’s office who told me certain things. (She told me that she was trying to get 12 months rent for the business premises at Archilleus, which she claimed she had not received.)
The third time that I attended Canberra which was in January 2009, I was feeling a bit more angry. The receptionist at Archilleus Accounting told me that Luke was not there. I told her that he had not returned my calls and that he owed me money and that I was not leaving the office until he turned up. I asked her to please get Luke on the phone and tell him that I was here. I was there about half and hour or so and Luke did not turn up. Then the Police turned up and said that Luke had made the complaint and that the receptionist had requested that I leave the office on several occasions which was not true as I had not been asked to leave. I explained this to them and they said that I had to leave anyway.
Mr Miller said that he had, by April 2011, not received any money from Mr Glanville, adding “[w]hatever he promised either bounced or failed to show up”.
During January 2009, Mr Gourley became aware of a number of invoices received by the Trust from suppliers which had not been paid.
Civil proceedings were commenced against Mr Glanville and subsequently resolved in April 2012.
In the documents admitted into evidence by consent was a copy of a draft Deed of Agreement and Release attached to an email sent by Mr Glanville to Mr Gourley on 19 March 2009. It was clearly part of the negotiations between the various parties to the civil proceedings prior to their settlement. The proposed parties to the Deed were Achilleus Account, Mr Glanville, Innuendo Advertising Pty Ltd, Mr Miller, and Mr Gourley. The Deed was prepared by Mr Glanville’s lawyers.
Ordinarily, the document would be subject to privilege under s 131 of the Evidence Act. No objection was taken by Mr Glanville to the admission of the document. At the time he was the guiding mind of the Trustee of the Achilleus Trust.
Further, Mr Gourley referred to the document and some of its contents in his statement to police and the draft was included in the emails he supplied to police. Mr Gourley was, at the time, the only Director of Innuendo Advertising Pty Ltd. He was also an employee or agent of Mr Miller.
A question, on which I was not addressed, is raised about whether the document is protected by privilege under the Evidence Act.
All the parties, it seems to me, were aware that the document was being admitted in the proceedings. Indeed, I am prepared to find that the conduct of the parties to the Deed all implicitly consented to its tender and so to its use. This would, in my view, bring the situation within s 131(1)(b) of the Evidence Act.
The only use to which the document could be put is to show that there is no reference in it to any loan or loans by Mr Glanville. The closest it comes is in a reference in the recitals to “disputes ... between the parties ... as [to]: (i) money held by Achilleus and Glanville for the Company”, which is, at best, ambiguous. Nevertheless, this seems somewhat inconsistent with the assertion on Mr Glanville’s behalf that the prosecution could not negative that the transfers were loans to Mr Glanville and the Achilleus Trust.
The offences
The theft offences
Twenty of the charges laid against Mr Glanville were for offences of theft, namely that he had dishonestly appropriated property, being a chose in action, belonging to Mr Miller, with the intention of permanently depriving him of the property. The offences were laid under s 308 of the Criminal Code. That section is as follows:
308 Theft
A person commits an offence (theft) if the person dishonestly appropriates property belonging to someone else with the intention of permanently depriving the other person of the property.
Maximum penalty: 1 000 penalty units, imprisonment for 10 years or both.
The elements of the offence are:
(a) dishonesty;
(b) intentional appropriation;
(c) property;
(d) belonging to someone else;
(e) the defendant being reckless as to whether it was property and whether it belonged to someone else; and
(f) with the intention of permanently depriving the other person of the property.
In the proceedings, there was no dispute about the element of what constituted dishonesty. Dishonesty is, of course, a matter of fact, as s 302 of the Criminal Code makes plain. If, as the prosecution alleged, Mr Glanville had no right and knew he had no right to the money said to be transferred by the electronic transfers or cash withdrawals and was aware of it then it is clear that he was acting dishonestly which is to be determined in accordance with the standards of ordinary decent people: R v Roux [2015] ACTSC 307 at [137]-[138].
Mr Glanville would, in order to avoid being found to have acted dishonestly, actually had to have believed that he had a legal right to act as he did: R v Bedford [2007] SASC 276; 98 SASR 514 at 517-8; [11]; R v Salvo [1980] VR 401 at 410-1, 420-3, 435. I shall deal with this further below (at [218]-[221]).
It is convenient to consider the third element next, that the subject of the offence must be property. In this case, the subject of the relevant charges was described as a chose in action. This is merely a right enforceable by action: Allgemeine Versicherungs-Gesellschaft Helvetia v Administrator of German Property [1931] 1 KB 672 at 704. A classic example of a chose in action is a debt. When the customer of a bank deposits money in the bank (by deposit of cash, a cheque or electronic transfer) there is created a debit, that is a debt which the bank owes to the customer, being the amount of the funds deposited (and, if any, interest that the contractual terms with the bank may provide, less, of course, any contractually payable fees): Foley v Hill (1848) 2 HL Cas 28; 9 ER 1002. This principle applies in Australia: Bank of New South Wales v Laing [1954] AC 135.
The definition of “property” in Pt 1 of the Dictionary to the Legislation Act 2001 (ACT), includes a chose in action, called there a “thing in action” but which means the same: Krishell Pty Ltd v Nilant [2006] WASCA 223; 32 WAR 540 at 557; [73].
Thus, the debt due to the Trust by the deposit of funds into the Trust’s Account is, for the purpose of s 308 of the Criminal Code, property which can be the subject of the offence of theft.
The second element of appropriation is the subject of some relevant definition in the Criminal Code. Thus, s 304(1) provides:
304 Appropriation of property for pt 3.2
(1)Any assumption of the rights of an owner to ownership, possession or control of property, without the consent of a person to whom the property belongs, is an appropriation of the property.
Here, the appropriation was said to be the transfer of the funds from the Trust’s Account to another account or by withdrawal in cash.
The transfer by the means of an electronic or telephoned direction of a debt from one bank account to another account, whether in the same or another bank, effects the extinguishment of the debt due to the original customer and the creation of a fresh debt to the owner of the other account.
This has been held in the context of the presentation of a cheque, improperly presented to a bank but which the bank pays, to be a theft of a chose in action by the person who presents such a cheque: Kohn (1979) 69 Cr App R 395 at 405-6.
In R v Jack [2002] ACTSC 90; 148 ACTR 1 at 5; [19], Crispin J held that the transfer of funds from the account of a bank’s customer to another account dishonestly opened by the accused, a bank officer, constituted the usurpation of the right of the customer and thus constituted an appropriation of property for the purposes of the offence of theft.
The legislation there, s 86 of the Crimes Act 1900 (ACT), referred to a person who “adversely interferes with or usurps any of the rights of an owner of the property”. His Honour referred in R v Jack at 4; [12]-[16] to Chan Man-sin v Attorney-General of Hong Kong [1988] 1 All ER 1 at 4 where the Privy Council referred to a definition of “appropriation” in the Hong Kong legislation that was similar to that in s 304(1) of the Criminal Code. His Honour considered at 4; [16] that there was “a potentially crucial distinction” between assumption of “the rights of the owner” to ownership possession or control and the terms of s 86 of the Crimes Act.
As noted, however, his Honour held that the transfer of the funds did constitute an adverse interference with the rights of the customer or a usurpation of those rights. In my view, this must, at the very least, also constitute an assumption of those rights. The transfer extinguished the right of the Trust as creditor to demand payment from the bank and created a debt for the like amount which the bank then owed to Mr Glanville. Ordinarily, only the owner of that debt can do that. In my view, this clearly constituted an assumption of the rights of the Trust as owner of the debt. Similarly, with cash withdrawals, the payment of cash by the bank, through an ATM or otherwise, was the discharge of the debt, a right which the Trust had and which, by the receipt of cash, Mr Glanville had assumed.
The assumption of those rights must be without the consent of the owner. For the reasons below (at [104]-[113]), the relevant owner is Mr Miller.
His consent, however, must be consent given by the owner “with full knowledge of [all] the circumstances”: R v Lawrence [1972] AC 626 at 632. Deception or fraud will vitiate such consent: R v Baruday [1984] VR 685 at 694. Despite trenchant criticism by the Model Criminal Code Officers Committee (MCCOC), Final Report: Chapter 3, Theft, Fraud, Bribery and Related Offences (MCCOC, Canberra 1995) at 39 (see footnote 30) of that decision, it has been followed since: R v Roffel [1985] VR 511 at 521; Harris Paper Pty Ltd v FAI General Insurance Co Ltd (1995) 8 ANZ Insurance Cases ¶61-276 at 76,061.
It would appear that, contrary to the equivalent provision in the Theft Act 1968 (UK) c 60, as repeated in the Crimes Act 1958 (Vic), the prosecution bears the onus of proof in relation to whether the owner has consented; that is, the prosecutor is bound to prove the absence of consent. I deal with that issue below (at [268]-[275]).
The fourth element was that the property, the chose or thing in action, had to belong to someone else. Because of the law of trusts here involved, there was some argument in the Magistrates Court about this element.
The trustee, Innuendo Advertising Pty Ltd, was the legal owner of the chose in action, the debt. While Mr Glanville was the sole director of the corporate trustee, it was, of course, a separate entity from him. Thus, the charges could have been pleaded that Mr Glanville had dishonestly appropriated the chose in action, namely the debt to the particular pleaded value, from the Trust, probably more accurately from Innuendo Advertising Pty Ltd as trustee of the Trust. It was the legal owner of the debt of which it was the trustee: JD Heydon QC and Justice Mark Leeming, Jacobs’ Law of Trusts in Australia (LexisNexis Butterworths, 8th ed, 2016) 3; [1-06]. See also s 40 of the Trustee Act 1925 (ACT), In re Patrick [1891] 1 Ch 82, Fitzroy v Cave [1905] 2 KB 364 at 373.
In this case, however, the prosecution pleaded that Mr Miller was the person to whom the chose in action belonged. In this, it appears that the prosecution was relying on s 305(2) of the Criminal Code, which provides:
305 Person to whom property belongs for pt 3.2
(2) if property is subject to a trust –
(a) The person to whom the property belongs includes anyone who has a right to enforce the trust; and
(b)An intention to defeat the trust is an intention to deprive any such person of the property.
In the Magistrates Court, it was said on behalf of Mr Glanville that the Trust was a discretionary trust, that is one where the entitlement of a beneficiary to income or the corpus or both is subject to a discretion in the trustee and so not immediately ascertainable: Commissioner of Stamp Duties for New South Wales v Buckle [1998] HCA 4; 192 CLR 226 at 234; [8]. Thus, the argument was, Mr Miller had only a hope that the discretion would be exercised in his favour and no proprietary interest in the Trust until distribution. This meant that Mr Miller had no enforceable claim to the income or capital of the Trust until the trustee exercised a discretion in his favour.
All that may be accepted, but it misses the point of s 305(2) of the Criminal Code, which refers to the “right to enforce the trust” and not a right to the income or to the capital of it or other proprietary interest.
Thus, while a beneficiary under a discretionary trust has no ascertained interest in property of the trust, he or she has an interest in the due performance of the trust. As Lord Wilberforce explained in Gartside v Inland Revenue Commissioners [1968] AC 553 at 617-8:
No doubt in a certain sense a beneficiary under a discretionary trust has an “interest”: the nature of it may, sufficiently for the purpose, be spelt out by saying that he has a right to be considered as a potential recipient of benefit by the trustees and a right to have his interest protected by a court of equity. Certainly this is so, and when it is said that he has a right to have the trustees exercise their discretion “fairly” or reasonably” or “properly” that indicates clearly enough that some objective consideration (not stated explicitly in declaring the discretionary trust, but latent in it) must be applied by the trustees and that the right is more than a mere spes. But that does not mean that he has an interest which is capable of being taxed by reference to its extent in the trust fund’s income: it may be a right, with some degree of concreteness or solidity, one which attracts the protection of a court of equity, yet it may still lack the necessary quality of definable extent which must exist before it can be taxed.
Kenny J explained the issue in Elliot v Secretary, Department of Education, Employment and Workplace Relations [2008] FCA 1293; 249 ALR 182 a case where a discretionary testamentary trust had been established for the son and daughter-in-law of the deceased and other beneficiaries including their daughter. Their pensions had been cancelled because it was held that the value of the assets of the trust attributed to them by Centrelink exceeded the allowable level of means test applicable to their pension.
Her Honour said at 193-4; [39]:
Under cl 5(b) of the will, each of the Elliot’s and their daughter has a right to be considered by the trustees as a possible recipient of a payment out of the income and capital of the trust in accordance with the terms of the trust. They also have a right to have the trustees consider whether they should be permitted to reside rent free in any property forming part of the estate. Each of them has a right to have the trust administered duly and properly: compare Gartside at All ER 133-5; AC 617-8 per Lord Wilberforce. They also had a right to receive information about the management of the trust fund and to see trust documents … Furthermore, the discretionary beneficiaries have a right to trace and follow the trust assets if they are misappropriated: Livingston at All ER 700-1; CLR 23-4; ALR 810-11, also I J Hardingham and R Baxt, Discretionary Trusts, LexisNexis, 2nd ed, 1984, at [517]. It is by no means self-evident, however, that, because of these rights, any of them has “beneficial interests in the corpus or income of the trust” within the meaning of s 1207V(2)(d) of the Social Security Act.
As Isaacs J said in Glenn v Federal Commissioner of Land Tax (1915) 20 CLR 490 at 504:
The estate of the cestuis que trustent [of a “special trust”] is ascertained simply by their right in personam to compel their trustee to perform the trusts so far as that interest is concerned.
It is important to appreciate the dual interests of a beneficiary. There is no doubt, as the above authorities show, that a beneficiary has a right in personam against the trustee to deal with the trust property for the benefit of the beneficiaries. See DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties [1980] 1 NSWLR 510 at 518-9. Whether the beneficiaries have also a right in rem is a more controversial matter, which the orthodox view suggests is not so, though more recent authority suggests that view may no longer be supported. See Darrell Barnett, “The nature of a beneficiary’s interest in the assets of an express trust” (2004) 10 Australian Property Law Journal 169.
The personal right of the beneficiary is, as the authorities make clear, a right to have the terms of the trust enforced, notwithstanding that the beneficiary may or may not have a proprietary interest in the assets of the trust.
Mr Miller, clearly a beneficiary, indeed the only Specified Beneficiary, had the right to compel the trustee of the Trust to perform the Trust, and so, as the learned Magistrate correctly held, was, in the terms of s 305(2) of the Criminal Code, a person to whom the property, namely the debt owed by the bank to the Trust, belonged.
The next element is the fault element to go with the physical elements of property and belonging to someone else. These two physical elements are circumstances and, since s 308 of the Criminal Code does not provide a fault element to either of them, s 22 provides that the fault element is recklessness.
Recklessness is relevantly defined by s 20(2)-(4) of the Criminal Code, as follows:
20 Recklessness
(1) A person is reckless in relation to a result if –
(a) the person is aware of a substantial risk that the result will happen; and
(b) having regard to the circumstances known to the person, it is unjustifiable to take the risk.
(2) A person is reckless in relation to a circumstance if –
(a) the person is aware of a substantial risk that the circumstance exists or will exist; and
(b) having regard to the circumstances known to the person, it is unjustifiable to take the risk.
(3) The question whether taking a risk is unjustifiable is a question of fact.
(4) If recklessness is a fault element for a physical element of an offence, proof of intention, knowledge or recklessness satisfies the fault element.
There can be no doubt that an accountant, as Mr Glanville was, would be aware that a chose in action is property. There was no contest to this.
That the property belonged to someone else is also a matter that an accountant would well know. Dealing with bank accounts as part of his stock-in-trade, Mr Glanville would be aware that he did not own any of the funds or the right to those funds in the Trust’s Account. Again, there was no contest to this.
The final element was that the intention of Mr Glanville must have been to deprive the Trust permanently of the property. Again, this is subject to some legislative interpretation in s 306(1)-(2) of the Criminal Code, which provide:
306 Intention of permanently depriving for pt 3.2
(1)A person (A) has the intention of permanently depriving someone else (B) of property belonging to B if –
(a) A appropriates property belonging to B without meaning B to permanently lose the property; and
(b) A intends to treat the property as A’s own to dispose of regardless of B’s rights.
(2)For subsection (1), if A borrows or lends property belonging to B, the borrowing or lending may amount to treating the property as A’s own to dispose of regardless of B’s rights if, but only if, the borrowing or lending is for a period, and in circumstances, making it equivalent to an outright taking or disposal.
(Emphasis included)
In this case, as the summary of the facts for each charge shows, Mr Glanville, once having transferred the funds, treated the transferred property as his own. That is to say, he realised the debt by further transferring the funds to his or Achilleus Trust’s Account and then used some of the funds to pay the company’s numerous expenses, to purchase personal items or simply take cash for his own purposes.
In addition, I note that s 305(2) of the Criminal Code, set out above (at [104]), also provides assistance in determining what constitutes the intention. Thus, where there is an intention to defeat the trust under which trust property is held, there is an intention to deprive the owner of the property permanently.
To defeat a trust is to use trust property for a purpose other than the purpose of the trust: Adamson v O’Brien [2008] NTSC 8; 22 NTLR 84 at [64].
The use of trust funds for Mr Glanville’s own purposes is not in accordance with the terms of the Trust. I shall deal with this issue further below (at [196]-[212]).
The false accounting offence
The other offence of which Mr Glanville was charged and convicted was a charge under s 350 of the Criminal Code of false accounting. That provision is as follows:
350 False accounting
(1)A person commits an offence if –
(a) The person dishonestly damages, destroys, or conceals accounting document; and
(b) The person does so with the intention of obtaining a gain or causing a loss.
(2)A person commits an offence if –
(a) The person dishonestly –
i.Makes, or concurs in making, in an accounting document an entry that is false or misleading in a material particular; or
ii.Omits, or concurs in omitting, a material particular from an accounting document; and
(b) The person does so with the intention of obtaining a gain or causing a loss.
Maximum penalty: 700 penalty units, imprisonment for 7 years or both.
(3)A person commits an offence if, in giving information for any purpose –
(a) The person dishonestly produces to someone, or makes use of, an accounting document that is false or misleading in a material particular; and
(b) The person is reckless about whether the accounting document is false or misleading in a material particular; and
(c) The person produces or makes use of the accounting document with the intention of obtaining a gain or causing loss.
Maximum penalty: 700 penalty units, imprisonment for 7 years or both.
(4)In this section:
accounting document means any account, record or other document made or required for an accounting purpose.
The prosecution initially appeared to rely in submissions on the BAS and the Balance Sheet and Profit and Loss account which had been sent by Mr Glanville to Mr Gourley. These were the documents that Mr Glanville said he would prepare and then send out by email to Mr Gourley.
The prosecution, however, pleaded that the accounting documents were the Balance Sheet and Profit and Loss account and did not include the BAS as one of them. It would have required an amendment to the charge to include the BAS in the offence and no application was made to do so.
These documents could not be reconciled with the bank statement of the Trust’s Account or the invoices of and provided to the Trust. A simple example is that the Balance Sheet stated that there was $28 965.49 in the St George Cheque Account; the Trust’s Account, never had that amount in it and certainly not in November or December 2008.
The offence was laid under s 350(2)(1)(a)(i) of the Criminal Code and contained the following elements:
(a)Dishonesty;
(b)Intentionally making or concurring in making an entry;
(c)The entry is false or misleading in a material particular;
(d)Reckless as to whether the entry is false or misleading in a material particular;
(e)In a document made as required for an accounting purpose;
(f)Reckless as to whether the document is required for an accounting purpose; and
(g)With the intention of gain or causing a loss.
The first element of dishonesty is the same as in the offence of theft which I have discussed earlier (at [87]-[88]). If Mr Glanville knew that the entry was false or misleading, then he was acting dishonestly in submitting the documents to Mr Gourley and Mr Miller.
The second element is that Mr Glanville intentionally made an entry in the document. The entry is of a kind further described in the next element and the document of a kind that is in element (e).
Mr Glanville had said to Mr Gourley and to Mr Miller that he would prepare all the relevant paperwork and he then sent to Mr Gourley the Profit and Loss Account, Balance Sheet and the BAS. These documents arrived on 18 December 2008 from Mr Glanville. There can be no doubt that Mr Glanville prepared the Profit and Loss Account and the Balance Sheet, both of which contained entries within the meaning of the offence provision and, in all circumstances, he made them intentionally.
The next element is that the entry must be false or misleading in a material particular. To be false is to be incorrect or untrue. “Misleading” is an ordinary English word and the courts are reluctant to provide any other meaning than its ordinary meaning, though it has been said that “to be misleading ... must convey a meaning inconsistent with the truth”: World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181 at 201. To be a material particular means that the particular must be important or something that matters: R v Mallett [1978] 1 WLR 820 at 822. That does not mean that it has to be critical or crucial, but it will depend on the circumstance. For example, a few dollars in a sum of some thousands is likely not to be material, unless the few dollars means that the sum does or does not reach a particular threshold, such as the monetary jurisdiction of a court or a particular tax bracket.
Here, the Profit and Loss Account and Balance Sheet appeared to omit large sums. The amount of $10 549.60 received from the Birkenhead Point Shopping Centre was not properly accounted for in the accounts and the income was understated by over $8000, about 10 per cent. The difference between $28 965.49 said to be in the Trust’s Account and the $6.01 is an important difference. In my views, these errors are material.
Other matters were clearly false or misleading. In the Profit and Loss Account, the total payments which were, under the terms of the engagement letter of 29 July 2008, payable to Achilleus Accounting, were:
(a) $990 per month (clause 4.2(a));
(b) any increase as a result of the estimated factors set out being exceeded (clause 4.2(b));
(c) further requested services (clause 4.4); and
(d) out-of-pocket expenses which “exceed reasonable expenses” (clause 4.5).
Achilleus Accounting, according to Mr Miller, resigned in October 2008, but the transfer does not seem to have been made at the latest until early December, but probably in November. A date in October is, of course, consistent with the three payments of monthly fees. I have not bothered, in the absence of appropriate assistance from the prosecution in dealing with the detail of these issues, to be more precise. Thus, the monthly fees payable from 29 July 2008 to 1 December 2008 total $3960.
The email correspondence between Achilleus Accounting Pty Ltd and Mr Glanville on the one hand, and Mr Miller, Mr Gourley and Mr Tory, did not show any indication of:
(a) any notification of any increase in work that would justify an increase in fees;
(b) any further requested services; or
(c) any excess of “reasonable expenses” for out-of-pocket expenses.
Indeed, there were, as already noted above (at [55]), payments made of $990 on three occasions.
Despite this, the total of fees asserted in the Profit and Loss Account referable to those to which the Achilleus Trust was actually paid was $8826.11 (that is $300 for “Accounting fees” and $8526.11 for “Admin Fee”). On the assumption that this included the three payments of $990 and, possibly also the fourth (November) payment then there remains between $5856.11 (if the fourth payment is not charged) and $4866.11 for which there is no accounting.
In the first group, the spending of the money acquired by transfer of the choses in action on personal or non-Trust business expenses, would clearly constitute Mr Glanville treating the money as his own. This applies in the case of charges 1, 2,
5-8, 10-12, and 14-17. This, by itself, would meet the criteria in s 306 of the Criminal Code and make out this element.
The second group are constituted by charges 3, 9, 13, and 18-20. The facts are somewhat less clear in that the funds were simply paid out in cash or transferred into an account over which Mr Glanville had control. The funds were in his possession for, at most, some months. Some seem likely to have been paid away but the evidence is not clear.
Nevertheless, Mr Glanville did not repay these sums, save for small amounts when required by the need to ensure that the Trust’s Account had sufficient funds in it to meet legitimate expenses that he had been directed to pay.
Further, the fact that he did not include these amounts as loans in the Balance Sheet and had to be sued for the return of the money assists in permitting the inference to be drawn that these sums also were intended to be permanently paid away from the Trust and Mr Miller as the beneficiary.
The only charge that has given me pause is charge 4, where the bank’s debt to the Trust of $800 was transferred to the Achilleus Trust Account to meet cheques for wages and car payments because the Achilleus Trust Account did not have enough funds in it to meet these payments. That sum, however, was repaid 11 days later.
That 11 days does not immediately seem to be the kind of “period” referred to in s 306(2) of the Criminal Code. Thus, the intention to deprive the Trust (or Mr Miller) of those funds permanently would not be made out on this fact alone.
On the other hand, the funds were paid away by Mr Glanville as if they were funds of Achilleus Accounting Pty Ltd as trustee of the Achilleus Trust, thus meeting the test in s 306(1)(b) of the Criminal Code.
Unfortunately, I was not favoured with any particularly helpful submissions on this issue.
It is clear that s 306(2) of the Criminal Code is a limiting exception to the general principle in s 306(1) in the case of a borrowing, such that it requires the conditions in it to be met for s 306(1). In this, it is similar to s 73(12) of the Crimes Act (Vic). This provision was subject to some consideration in R v Dardovska [2003] VSCA 4; 6 VR 628, where, at 635; [24], Charles JA, with whom Phillips CJ and O’Bryan AJA agreed, held that the relevant provisions of the Victorian Act should be so interpreted.
His Honour held that, despite the statutory provisions, some element of the need for an intention to deprive the owner permanently was still required unless the statutory provisions prevailed.
It is also relevant to have regard to s 306(3) of the Criminal Code which provides:
(3) Without limiting this section, if –
(a) A has possession or control (lawfully or not) of property belonging to B; and
(b) A parts with the property under a condition about its return that A may not be able to carry out; and
(c) the parting is done for A’s own purposes and without B’s authority;
the parting amounts to treating the property as A’s own to dispose of regardless of B’s rights.
This is a re-statement of what at common law was known as “the pawning principle” (R v Medland (1851) 5 Cox CC 292) whereby it was proof of an intention permanently to deprive where a person pawned another’s property without consent, hoping to be able to redeem the pledged property but without the certainty of the ability to do so. It is also repeated in s 73(13) of the Crimes Act (Vic).
In Director of Public Prosecutions v Brownlie (a pseudonym) [2015] VSCA 147; 45 VR 362 at 370; [26], the Court said:
The effect of ss 73(12) and 73(13) is, in our view, tolerably clear. Subsection (12) provides that, if a person appropriates property belonging to another – without meaning the other permanently to lose the thing itself – the person is nevertheless to be regarded as having the intention to permanently deprive, if his intention is to treat the thing as his own to dispose of regardless of the other’s rights. And subsection 73(13) provides that a person is to be regarded as treating the property as his own to dispose of regardless of the owner’s rights in circumstances where he parts with the property under a condition as to its return which he may not be able to perform (if done for purposes of his own and without the owner’s authority).
In this case, there was clearly a financial embarrassment that Mr Glanville experienced. He needed funds to meet that and took them from the Trust’s Account. Less than a fortnight later he repaid them. He did so recording reasons that sought to conceal what he really had done; that, however, proved dishonesty and did not prove the intention to deprive permanently.
Nevertheless, at the time that Mr Glanville transferred the chose in action, he had no certainty of being able to restore it. Indeed, there was a history, even at that early stage, of needing funds from the Trust’s Account to meet his financial needs. In my view, he could not show that he was able to repay, even though he actually did repay. Thus, this charge is also made out.
I am satisfied that there is proved beyond reasonable doubt that the transfers of the chose in action in each of the theft charges was made with the intention by Mr Glanville to deprive Mr Miller permanently of the debts owed to the Trust.
False Balance Sheet
Mr Glanville challenged the false accounting charge on the basis that the Court could not be sure that the Balance Sheet and Profit and Loss Accounts were false or misleading in a material particular. Reliance was placed by his Honour on the fact that the Trust’s Account with the bank did not appear to correlate with the information on the Balance Sheet.
It was pointed out that there was no evidence, such as from a forensic accountant, to explain the Balance Sheet and, in particular, whether there should be such a correlation.
This is, however, not quite how his Honour put it, saying:
The prosecution’s submission was that the statement and balance sheet appear to be entirely fabricated since it bore no relationship to the ingoing or outgoing money or to the final balance of Innuendo account. In particular, it was the prosecution’s submission that this document includes lies as to the assets in the St George Account and the money supposedly given to William Miller, that is the loan to Bill Miller set out within the profit and loss statement of the balance sheet.
It is tolerably clear that the learned Magistrate accepted this submission, his Honour saying:
I accept the prosecutor’s assertion that a comparison of those documents to both bank statements and the invoices proves impossible to reconcile the true balance of the accounts and the conduct which occurred in the withdrawal of moneys from the trust by the defendant.
This, however, is not merely an unevidenced submission. Mr Gourley’s statement, admitted without objection and on which he was not cross-examined, provided:
On 18 December 2008 Luke emailed me two Adobe PDF electronic files, one was a copy of the BAS for July-30 September 2008 for the Innuendo Advertising Trustee, the other was a Balance Sheet for the Trustee for Innuendo Advertising which was dated 17 December 2008 at 11.40pm and a Profit and Loss statement for the period July-December 2008. In the email it also stated that the balance going into the ‘Westpac’ account was $11384.69. The email did not state where this money was coming from, but I presumed it was the balance of the Innuendo Trust Account held at St. George Bank. This was the first time Luke had provided me with an actual figure of what was supposedly in the St. George Innuendo Trust account ...
I checked over the BAS and the balance sheets that Luke had emailed me on 18 December and I realised that the figures that Luke had provided were not correct. I could see that the income reported on the balance sheets was significantly less than the reported income on the BAS. I also checked all the invoices that Innuendo had provided to clients so I could see what the income for Innuendo should have been. I saw that the income should have been about $91,130.00, as per the BAS which Luke had drafted, whereas Luke’s Profit and Loss statement has an income as $82,842.43.
That Mr Gourley did not disclose any accounting qualifications would limit the Court’s right to rely on any expertise. Here, however, it is clear that he carried out a mathematical exercise: he added “all the invoices” that the Trust had sent to clients. The total matched that of the BAS. That the Profit and Loss Account showed a lesser amount was consistent with Mr Glanville wanting to reduce the amount received into the account to conceal his withdrawals.
Mr Gourley had further performed another mathematical exercise, reporting in his statement to police:
I examined these documents and found that there were no bank statements included and nothing to suggest that the remaining funds in the St. George Innuendo Trust Account had been transferred to the new Westpac Innuendo Trust account. I used the information that Luke had provided, along with the invoices and records that I had access to, to try recreate the account. I tallied the figures and found a number of discrepancies. I found that it seemed that $11,786.80 which was owed to creditors who had provided a service to Innuendo Advertising did not seem to have been paid. Further there was a payment received from Birkenhead Point for $10,549.60 on 27 June 2008 which had not been correctly accounted for. I was unable to work out how Luke had arrived at the figure of $11384.69 that he had earlier suggested was the final amount to be paid to new Westpac Trust Account.
In my view, his Honour was entitled to rely on this unchallenged evidence to say that the Balance Sheet and Profit and Loss Statement which did not show all the income of the Trust and which did not show any loss or other withdrawals made by Mr Glanville was false or misleading in a material particular.
There were, in any event, the clear falsities that were apparent on the evidence and to which I have earlier referred (at [126]), [132], [137], [139]-[141]) which did not need a forensic accountant to show were false or at least misleading.
Mr Miller as the Owner
While not “abandoning” the challenge in the Magistrates Court to the prosecution’s assertion, as pleaded, that Mr Miller was the owner of the property, neither written nor oral submissions were made on the appeal on the issue. Ordinarily, that would be sufficient for the Court not to need to address the issue.
Nevertheless, the issue can be dealt with briefly. I have, in fact, set out the law, with some reference to the facts, earlier in these reasons (at [102]-[113]).
The submissions of Mr Glanville’s counsel before the learned Magistrate relied on the fact that Mr Miller “had no control of the monies that were paid into the trust account”. Further, reliance was placed on the fact that “he had an expectation or hope that he could not force the trustees [sic] to exercise their discretion in a particular manner”.
The matters already addressed are an answer to those submissions which direct attention at the wrong interest of Mr Miller. The submissions state the law correctly, but omit the relevant law that Mr Miller had power and the right to force compliance with the Trust.
The submissions before the learned Magistrate continued:
the power contained within the trust deed are extremely wide in their nature and, whilst the trust is in operation, permit the trustee to act broadly.
Again this may be accepted but it does not address the issue, for the trustee is still obliged to use the power, not without limit or hindrance, but only for the objects of the Trust. That a trustee may not do so, provides a beneficiary with the opportunity to take action to enforce the Trust were that to occur. This then is Mr Miller’s right regardless of the width of powers given to the trustee by the terms of the Trust.
Specific mention was made of subclause 7.3, which is set out above (at [39]) and, as noted above (at [40]), the italicised words were particular subject of submissions.
Two things may be said about this. In the first place, it is still subject to Mr Miller’s right to enforce the terms of the Trust. That is not ousted, though the width of the provision may mean that the occasion when Mr Miller could successfully challenge actions of the trustee may be limited. That, however, is irrelevant for the purposes of identifying the owner of trust property for the purposes of the offence of theft under the Criminal Code.
Secondly, subclause 7.3 does not relieve the trustee of the need to make investments that were in the interests of the Trust and, in particular, did not in terms permit such loans to be made freed of interest. In my view, the terms of the Trust would have to address this issue directly and expressly to overcome the fundamental duty of a trustee to invest in loans that gave value to the Trust by interest or otherwise.
While the Trust Deed does permit the Trust to employ and pay an accountant for professional services, this was done in the agreed sum of $990 per month and this power is not available to show that clause 13 of the Trust Deed provided a defence to the charges.
Consent
In oral argument on the appeal, Mr Glanville’s counsel referred to part of the statement of Mr Miller. I reproduce the whole paragraph of Mr Miller’s statement to put it into context:
There is another amount of $3000 which the receipt states is transferred from ‘Luke Glanville’ to an account number ending in 318 which is a personal St George account that belonged to me. The full account number of this account (which has since been closed) is 552278318. I do not know why Luke would be transferring money directly to me from him. I do not remember making a phone call and I cannot find evidence of an e mail that I sent him asking that such a thing be done however I may have requested this for a reason that I do not remember now. The above listed amounts from e mail receipts are the only e mail receipts that I can find. It appears as though I did not receive anymore e mail receipts after this.
This transaction is not the subject of a charge and so does not undermine any finding of guilt. There is, also, email correspondence about it.
While, at first blush, it might be said that this raises a doubt about the other transactions; Mr Miller’s memory here is shown to be incomplete. It needs, however, to be recalled that this was a payment from Mr Glanville personally and not from the Trust.
It is also important to note what Mr Miller had earlier said:
Approval of expenses and subsequent requests of payment to Luke came from both myself and Simon. I would sometimes give Luke verbal approval over the phone to make a payment. This would be if I needed cash or if I wanted my rent paid. I had an expectation that unless Luke had my written or verbal approval he was not permitted to do anything else with the account and the money in it.
There were no wages paid within Innuendo, staff were paid from Pulp Advertising from the St George Pulp Advertising account which was not linked in any way to the trust account. At the beginning when Luke first started as my accountant and director of the trust fund, I would get a receipt via e mail to show that a payment had been made. While going through my personal computer I have located a few e mail receipts which appear to be automatically generated e mails from St George Bank advising of an internet banking transfer. At the time I did not pay any attention to these e mails. Upon looking at these receipts more closely I have found the following payments and dates; [and then follows a list of six payments which Mr Miller describes as legitimate].
This has to be read in the light of the evidence of Mr Gourley as to how the payments from the Trust’s account were to operate, namely that they would be generated by Mr Tory sending invoices to Mr Glanville for processing.
Mr Tory’s evidence was consistent with this.
Everything that Luke got was over the email, as opposed to through the mail as it was quicker. The things that I would send Luke would be invoices, credit card statements and requests for bank transfers for Bill. The frequency at which I needed to correspond with Luke changed week by week. Sometimes I would only need to contact him once a week, and other times it would be up to ten times a week.
The emails relating to the one personal payment to Mr Miller shown in the account is also recorded in emails from Mr Tory to Mr Glanville.
The only evidence is that Mr Miller did not intend to or did not approve advances to Mr Glanville. It was not suggested in the unchallenged evidence that he did. The only approvals were for cash to him, Mr Miller, and there are two occasions where that happened and the money went into Mr Miller’s account, though via Mr Glanville’s St George Account, and rent. They were documented. That the other payments did not go to Mr Miller’s account and so do not come within the range of possibly approved payments for “needed cash”, seems clear and unarguable.
All this permits an inference to be drawn beyond reasonable doubt that no consent was given by Mr Miller to any of the payments the subject of the charges. It would have been better if the prosecution had adduced more direct evidence; that would have avoided the need to rely on the disparate aspects of the evidence to base the inference I am content to draw beyond reasonable doubt. It suggests that the complexity and commercial nature of the evidence required was such an area of unfamiliarity for investigators and prosecutors that they did not focus as clearly on what was needed as they might have done.
A general rather than specific approach
The final challenge was that the learned Magistrate approached his Honour’s task by considering the theft charges generally instead of dealing with each one specifically.
There is no doubt that his Honour did approach the matter in this way. While I am loathe to criticise a Magistrate who, in a busy court, cannot be expected to spend the time that superior courts may spend in dealing with such matters, it is, of course, essential to administer justice and the matters must be addressed properly.
The learned Magistrate’s reasons can be criticised to some extent for this “broad brush” approach. Nevertheless, it has not led to a miscarriage of justice.
None of the matters that would require individual consideration are sustainable: the elements of the offence were applicable generally. Thus, the elements of the offence were made out in a way that applied equally to each transaction the subject of each offence.
Thus, there was no consent generally to Mr Glanville “borrowing” money for himself or paying personal expenses. It was not necessary to consider each offence separately to determine whether consent may have been given to it. The one transaction about which Mr Miller expressed some lack of memory was not the subject of a charge and the circumstances of it were sufficiently different to the other transactions that it did not raise a doubt about the others.
I did, however, address the charges more specifically in relation to the issue of whether they could be said to be made with an intention to defeat the trust. See above (at [196]-[213]). There were differences here that required specific attention, though even there, the commonality led to them being dealt with in three groups, but I found that evidence still made out the offences.
I also dealt with them more specifically in relation to the question of whether there was an intention permanently to deprive the owner of the property. See above (at [232]-[248]). Again, while it may be that the learned Magistrate should have addressed these issues more specifically, I have found that the evidence still made out the offences.
While his Honour’s approach can be criticised for not dealing with some issues more particularly, it also needs to be accepted that the defence was not put to his Honour in this way; it was put that there were fundamental issues which applied across each of the theft offences and it was because they were not able to be made out beyond reasonable doubt that the prosecutions should fail.
Thus, the submissions to the learned Magistrate made for Mr Glanville by his counsel were summarised as follows:
Accordingly in respect of all the theft charges it is submitted that the prosecution are unable to prove beyond reasonable doubt that the property, being a thing in action, belonged to William Miller. If the thing in action belonged to anyone it belonged to the trust to be dealt with in accordance with the trust deed. Moreover the prosecution are unable to prove that Mr Glanville dishonestly appropriated the property as the trust deed gave the trustee, in effect Mr Glanville, an extremely wide discretion in how he could deal with the trust monies and that included advancing or lending money to any person, including the trustee, with or without security and on such terms and conditions as the Trustee shall think fit.
This challenge cannot be sustained and must fail.
Disposition
I have not found that any challenge to the findings of guilt have succeeded.
The findings of guilt made by the learned Magistrate were not unsafe or unsatisfactory.
Accordingly, the proceedings should be remitted to the Magistrates Court for sentencing. I will so order.
| I certify that the preceding two hundred and eighty-nine [289] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Refshauge. Associate: Date: 10 May 2017 |
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