Graham-Helwig v The State of Western Australia
[2005] WASCA 127
•6 JULY 2005
GRAHAM-HELWIG -v- THE STATE OF WESTERN AUSTRALIA [2005] WASCA 127
| (2005) 30 WAR 221 | |||
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2005] WASCA 127 | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CCA:166/2004 | 13 APRIL 2005 | |
| Coram: | MALCOLM CJ WHEELER JA PULLIN JA | 6/07/05 | |
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Appeal dismissed | ||
| A | |||
| PDF Version |
| Parties: | MARK HENRY GRAHAM-HELWIG THE STATE OF WESTERN AUSTRALIA |
Catchwords: | Criminal law and procedure Appeal against conviction Fraud "Deceit" and "fraudulent means" meaning of Inferences direction |
Legislation: | Criminal Code (WA), s 409(1)(c), s 409(3), s 563A(1)(a) |
Case References: | Digital Pulse Pty Ltd v Harris (2002) 166 FLR 421 DPC Estates Pty Ltd v Grey & Consul Development Pty Ltd [1974] 1 NSWLR 443 Horsington and Bortolus v The Queen (1983) 14 A Crim R 118 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 Parker v McKenna (1874) LR 10 Ch App 96 Peters v The Queen (1998) 192 CLR 493 R v Olan, Hudson & Hartnett (1978) 41 CCC (2d) 145 Re London & Globe Finance Corporation Ltd [1903] 1 Ch 728 Tan v The Queen [1979] WAR 149 WA Forklift Distributors Pty Ltd v Jones [2003] WASC 102 Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : GRAHAM-HELWIG -v- THE STATE OF WESTERN AUSTRALIA [2005] WASCA 127 CORAM : MALCOLM CJ
- WHEELER JA
PULLIN JA
- Appellant
AND
THE STATE OF WESTERN AUSTRALIA
Respondent
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram : CRISFORD DCJ
File No : IND 999 of 2003
Catchwords:
Criminal law and procedure - Appeal against conviction - Fraud - "Deceit" and "fraudulent means"; meaning of - Inferences direction
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Legislation:
Criminal Code (WA), s 409(1)(c), s 409(3), s 563A(1)(a)
Result:
Appeal dismissed
Category: A
Representation:
Counsel:
Appellant : Mr J D Allanson
Respondent : Mr L P Rayney & Mr L M Fox
Solicitors:
Appellant : Stephen Smith
Respondent : State Director of Public Prosecutions
Case(s) referred to in judgment(s):
Digital Pulse Pty Ltd v Harris (2002) 166 FLR 421
DPC Estates Pty Ltd v Grey & Consul Development Pty Ltd [1974] 1 NSWLR 443
Horsington and Bortolus v The Queen (1983) 14 A Crim R 118
Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41
Parker v McKenna (1874) LR 10 Ch App 96
Peters v The Queen (1998) 192 CLR 493
R v Olan, Hudson & Hartnett (1978) 41 CCC (2d) 145
Re London & Globe Finance Corporation Ltd [1903] 1 Ch 728
Tan v The Queen [1979] WAR 149
WA Forklift Distributors Pty Ltd v Jones [2003] WASC 102
Case(s) also cited:
Nil
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1 MALCOLM CJ: In my opinion, this appeal against conviction should be dismissed for the reasons to be published by Wheeler JA. I only wish to add some brief comments of my own.
2 Section 409 of the Criminal Code (WA) which creates the offence of fraud has been said to bring together some of the forms of dishonest conduct in relation to property which fall outside the scope of the offence of stealing. Section 409(1)(e) – (f) extends to inducing acts or omissions. As pointed out in Colvin, Linden and McKechnie, "Criminal Law in Queensland and Western Australia", 3rd ed 2001, the introduction to s 409 refers to a person who acts "with intent to defraud, by deceit or any fraudulent means". The authors suggest that the terms "defraud" or "fraudulent means" in the Code ordinarily mean to deprive a person of something "dishonestly": cfPeters v The Queen (1998) 192 CLR 493 at [20] – [22] and [24] per Toohey and Gaudron JJ in which their Honours stressed that in the context of a conspiracy to defraud there was a need for an agreement to use "dishonest means". In my opinion, their Honours discussion of "dishonest means" provides a degree of enlightenment on the meaning of "fraudulent means" in the context of obtaining a benefit by "deceit or fraudulent means" in the context of s 409 of the Code. In my opinion, the conduct of the appellant in setting up the fictitious businesses described by Wheeler JA clearly constituted the deprivation of property of Angus and Coote, namely money, by "deceit or dishonest means".
3 WHEELER JA: The appellant was tried on an indictment containing 32 charges, being 30 of obtaining a benefit by deceit or fraudulent means (Code, s 409(1)(c)) and two charges of property laundering (Code, s 563A(1)(a)). He was convicted of six counts of obtaining a benefit by deceit and one count of property laundering. The counts on the indictment could be notionally divided into groups, being fraud charges related to invoices paid on the same day, and related property laundering charges in two cases. The conviction in essence was for one group of six counts all relating to the obtaining of money on 2 February 2002 and the property laundering charge related to that being count 32.
4 The facts out of which the conviction arose were that the appellant was a regional manager for Western Australia of a national chain of jewellery stores ("Angus and Coote"). His employer operated Edments stores in Western Australia and he was the regional manager for Edments in Western Australia. He arranged for a white van which he owned to be used by Edments' employees for moving stock between Edments' shops. He caused to be presented invoices drawn up by him or by others acting on his instructions, headed "Wire Couriers", in relation to these services.
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- The name "Wire Couriers" was not registered as a business name and there was no business entity which operated under that name. There were no staff employed, assets owned, or liabilities incurred by Wire Couriers. Each month, Wire Couriers presented an invoice for work done and submitted that to the State office in Perth. The system within Edments was that approval was given by way of payment approval vouchers for each invoice, with the invoices then going to the head office in the Eastern States for them to be paid. The appellant himself signed, or directed other employees to sign, the payment approval vouchers. Payment was made by cheque in all cases except in respect of the last group of invoices, for which convictions were recorded, that payment being made by electronic funds transfer.
5 In opening its case, the State put it in the following terms at AB 27:
"In fact he was the man behind Wire Couriers. We say that he concealed that from his employers and he did so dishonestly and with an intent to defraud them; in fact he owned the van. The drivers that were doing the courier run were employees of Angus and Coote.
…
Of course Angus and Coote thought that they were paying Wire Couriers but, in fact, it was the accused who was getting the benefit of it. We say that he did that by way of deceit or fraudulent means; in other words, by way of deception and by way of a dishonesty with intent to defraud; in other words, to induce Angus and Coote to act to their detriment.
It's not to the point whether he intended to actually cost Angus and Coote more than a normal courier service may have cost. It may have been financially beneficial to them. That's not the point and it's not something that you need trouble yourself about. What is to the point is that he denied Angus and Coote the opportunity to make the choice because, as you might appreciate, having a senior officer of your own company obtaining funds in this fashion gives rise to potential conflicts of interest. They don't know whether a rational decision is being made as to the costs involved, whether they could do a better deal otherwise."
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- The State continued at AB 28:
"If you are satisfied, ladies and gentlemen, we suggest, that he obtained those benefits, as outlined in the indictment, and that he concealed the identity of Wire Couriers and that he was in fact the man who was pocketing the money at the end of the day from his employers in order that they not be able to have all the full facts at their disposal in order to protect their own interests, then you will find the charges proved."
7 A number of employees of Edments gave evidence that either they had not heard of Wire Couriers, or that they had heard of Wire Couriers but had not been told by the appellant that he had any connection with that enterprise. The only exception amongst the Edments' employees was a Mr McSkimming, a previous store manager of Edments, who did understand that the appellant owned Wire Couriers. He was married to the niece of the appellant's wife.
8 Mr Davidson was an electrician, who did electrical work for Edments. An Edments employee asked him where his white van was, calling it a "courier" van. He mentioned this conversation to the appellant and the appellant told him "if anyone asks, you own a white van". Mr Davidson also gave evidence that the appellant asked Davidson's wife to type up invoices for Wire Couriers. He said that the appellant asked if he could use Davidson's bank account to deposit funds owed to Wire Couriers, since Wire Couriers did not yet have a bank account. He did so, and his wife then withdrew a bank cheque on that account in favour of the appellant. Under cross-examination, the appellant was unable to explain why he had taken that course. It was true that Wire Couriers did not have a bank account, but the cheque therefore had to be endorsed so as to be payable to Davidson's account; there was no reason advanced why it could not have been endorsed so as to be payable into the appellant's account. Mrs Davidson gave some evidence confirming Mr Davidson's
(Page 6)
- evidence. The jury, however, acquitted in respect of those counts involving cheques. They convicted in respect of occasions on which the appellant had used Mr Davidson's account details, rather than his own, to obtain payment by electronic funds transfer.
9 The appellant himself gave evidence to the effect that Wire Couriers was a cost effective plan for the benefit of Edments, which had had problems with other couriers in the past, both in relation to the cost of the courier service and in relation to loss of items and damage to items. He agreed under cross-examination that there was nothing on the invoices which he prepared to link him with the courier service, and the clear tenor of his evidence was that he knew it was not the way in which his employers would have wished deliveries for Edments to be carried out. He called three character witnesses.
10 Section 409(3) of the Code of course provides that it is immaterial that the accused person intended to give value for the property obtained or benefit gained, and it is clear that the appellant did obtain a benefit, in the form of payment of the various invoices. The defence as I understand it then was directed at the question of whether there was an intent to defraud, and to a lesser extent it seems the question of whether there was a deceit.
11 The grounds of appeal fall into three categories. The first is contained in ground 1, and alleges that her Honour erred in law in failing to direct the jury that for the appellant to be guilty of obtaining a benefit by deceit or fraudulent means by concealing from his employer that he was the person behind Wire Couriers, they must first find a duty to disclose that information to his employer. In relation to that ground, authority is cited for the proposition that a person can be guilty of fraud when he dishonestly conceals information from another which he was under a duty to disclose to that other.
12 To find authority for that proposition, however, is not the same as finding authority which establishes that a person will only be guilty of deceit or fraudulent means when he dishonestly conceals information which he is under a duty to disclose. It was properly conceded by counsel for the appellant that there was a "wealth of evidence" of active concealment by the appellant of his association with Wire Couriers. There was also a wealth of evidence that the true nature of the appellant's association with Wire Couriers, and the nature of that service, were facts which the appellant's employer would have considered relevant. In any event, as to the latter matter, her Honour expressly directed the jury that it
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- would be necessary for them to find that there was a causal connection between the appellant's dishonesty and the payment of the invoices in order to find that the obtaining was "by" deceit.
13 "Deceit", both in its ordinary meaning, and as understood in the criminal law, means "to induce a man to believe that a thing is true which is false, and which the person practising the deceit knows or believes to be false": Re London & Globe Finance Corporation Ltd [1903] 1 Ch 728 at 732 per Buckley J; Tan v The Queen [1979] WAR 149 at 153 per Burt CJ, 156 per Wallace J. Put simply, it seems to me that the deceit in this case was that the appellant knew that Wire Couriers was not an ordinary arm's length courier service and that, by his concealment of the true state of affairs, he induced Angus and Coote to believe that it was.
14 Even if the jury had taken the view that it was not satisfied that there was a deceit, in that it may have been that Angus and Coote made no assumption relating to the nature of Wire Couriers, it would appear that the active concealment of the true state of affairs, would fall within the expression "other fraudulent means". There is no authority in this State setting out precisely what is meant by that term. However, in relation to the rather similar s 338(1) of the Canadian Criminal Code, the Canadian Supreme Court concluded that that expression should be given the broadest possible meaning, encompassing "means which are not in the nature of a falsehood or a deceit; they encompass all other means which can properly be stigmatized as dishonest": R v Olan, Hudson & Hartnett (1978) 41 CCC (2d) 145 at 149. That meaning seems to be consistent with the history of s 409. It was introduced as a result of recommendations in the Murray Report (M Murray, The Criminal Code (A General Review) Perth 1983) and the recommendations in that report make it clear that it is intended to extend to those who dishonestly fail to call attention to the true state of affairs. For example, it would extend to the person who gains admission to a cinema by sneaking unnoticed through an unguarded door (page 267). In this case, the appellant is alleged to have taken a number of steps to ensure that the true state of affairs did not come to the attention of his employers. I see no reason why those should not be "fraudulent means".
15 The next category of grounds of appeal complain that her Honour left the jury with a "false dichotomy" between "full and frank disclosure and transparency" on the one hand and intent to defraud on the other. Clearly, there was not in this case full and frank disclosure, and it is submitted that the jury may have been under the mistaken impression that all the State had to establish was an absence of such full and frank
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- disclosure for there to be an intent to defraud. There are, I think, two difficulties with this submission. One is that it takes certain passages of the direction out of context and places an emphasis upon them which the jury would not I think have understood them to have. The second and practical difficulty is that, on the case as run by the State, not only was there no full and frank disclosure, but there was no disclosure of any kind; the appellant's counsel was not able to point to any intermediate position which the jury could have considered to exist and which could, in the context of the alleged false dichotomy, have led them wrongly to convict.
16 The first reference to "transparency" appears at page 412 of the appeal book. That is towards the end of a fairly lengthy direction in relation to the question of obtaining "by" deceit or fraudulent means. Her Honour had explained to the jury that it was important that they consider whether there was a connection between the behaviour of the appellant and the payment of the invoices; that is, that the money was obtained "by" the conduct alleged. Having explained that in some detail, her Honour pointed out that, of course, the appellant would suggest that Angus and Coote paid the invoices because they were being supplied with a competitive service, that, in effect, they were paying "a good price for a good service". It was in that context that she said that the jury had to ask whether payment was made "as a result of an informed choice, was there transparency, was there openness or was there deceit and fraudulent means in inducing the payment". That question was asked in the context of a discussion of the evidence from senior personnel in Angus and Coote explaining why it was that they would have had concerns about the invoices presented had they known that the appellant was connected with Wire Couriers. It did no more than draw attention to the relevant question of whether the appellant's behaviour, by concealment of that connection, had caused Angus and Coote to make payments without taking any steps or making any inquiries, which the evidence suggested otherwise might have been taken, in order to protect its interests.
17 Having looked at the question of whether payment was induced "by" deceit or fraudulent means, her Honour then (properly) instructed the jury that there must also be a finding of an intent to defraud, that being more than mere carelessness and more than an unreasonable belief. In that context, her Honour set out what the accused had said about his intentions and said the following at AB 414:
"So, ladies and gentlemen, when the accused provided the invoices for payment he believed that he was well able to do so on the basis that he provided the van and/or the courier services
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- using Angus and Coote employees, then clearly it would seem to me you would probably find that he didn't have an intent to defraud."
18 As I understand it, no issue was taken with that passage, it being essentially a paraphrase of the submission made to the jury on behalf of the appellant and the conclusion suggested to the jury that it would follow from that evidence that there was no intent to defraud. Her Honour then continued:
"On the other hand if, as the State alleges, he knew he shouldn't be presenting the invoices and receiving the benefits without a full and frank disclosure, bearing in mind Mr Fenn's discussions with him, so that there wasn't a full and frank disclosure of the position of Wire Couriers vis-a-vis himself, then an intent to defraud would seem to follow; so you have the two positions and it's depending on how you view the facts."
19 I should add that, although some issue was taken with her Honour's reference to "two positions", there were, it seems in this trial, only two possibilities, they being either that the accused did believe that he was providing a service in a manner which was open to him, or that he had actively concealed the true position knowing that his conduct would not be authorised or approved. Her Honour did not suggest at that point, or at any other point, that it was necessary for the jury to choose one of those positions; it was clear from her direction that they could only convict if they were satisfied beyond reasonable doubt that the State had made out its contentions. In relation to the principal criticism of this passage - that is, the contrasting of intent to defraud and "full and frank disclosure" - that does not seem to me to be the thrust of the passage I have quoted. Rather, the emphasis would have been understood by the jury to have been on the appellant's alleged knowledge that he should not be presenting the invoices in a situation where there had not been disclosure ("full and frank" or otherwise) of his association with Wire Couriers.
20 A further criticism of this part of the direction is the reference to the evidence of Mr Fenn. It is submitted that the evidence of Mr Fenn does not support the suggestion, implicit in her Honour's direction, that his view was that an association of this kind would need to be disclosed. It would be a matter for the jury what view they took of Mr Fenn's evidence, but the State accepts that it may not have gone so far as to suggest that there was a need to disclose an interest of the kind which the appellant had in Wire Couriers. However, as the State notes, her Honour did not at
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- this point refer to the evidence either of Mr Teverrow, who was the Acting National Manager at the time, and who very clearly said it was the policy that independent contractors should be used and that if he had known that the appellant had a financial interest in the courier service, it would have been necessary for the appellant to "discontinue that immediately" (AB 295). Nor did her Honour refer in this context to the evidence of Mr Colman, the Loss Prevention Manager for Angus and Coote, whose evidence was that if an employee was providing a service to Angus and Coote or one of its entities, that was something that Angus and Coote would "absolutely" want to know about, "[s]o that then they could make their decision on whether invoices would be paid and to make sure there was no conflict [of interest]" (AB 228).
21 So far as the reference to Mr Fenn is concerned then, it seems that her Honour may have identified the wrong person as the giver of the relevant evidence, but there was certainly evidence which, if accepted, would support a finding that the appellant was required to disclose matters of this kind. The relevance of Mr Fenn's evidence was that he had conversations with the appellant, that he was sure that he had at some point discussed deliveries, and that he had no recollection of the appellant disclosing any association with or interest in Wire Couriers. Further, his conversation with the appellant was to the effect that Angus and Coote would not have been interested in buying a van for its own deliveries (AB 267), and the appellant was therefore aware of that policy.
22 Finally, an issue was taken with her Honour's direction in relation to the drawing of inferences. The gravamen of the complaint in relation to this direction is that her Honour said to the jury, having first explained that, before they drew an inference adverse to the accused, they must be satisfied that it was the only inference reasonably available, that "it's up to you to have a look at both inferences, the competing inferences, and if they're both reasonable then the accused gets the benefit. You must draw the inference that's most favourable to the accused, if they're both reasonable" (AB 416). It is submitted that that weakens the force of the principle that an inference adverse to an accused person can be drawn only if it is the only rational inference available. I am not sure that what her Honour said to the jury would have been understood as meaning anything different from the more usual direction. Presumably, if an inference was "unreasonable", then it would not be a rational one, and the competing inference would be the only available inference. It is submitted in relation to this direction also that it is apt to mislead the jury by suggesting that there may be only two inferences available, in relation
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- to various matters, when it is for the jury to consider what inferences are available and that there may be more than two. That is, of course, theoretically so, but, as I have observed, in the present case it is difficult to see any inferences other than the competing ones contended for by the State on the one hand and the appellant on the other. Counsel for the appellant appearing at the appeal was unable to suggest any other or intermediate positions.
23 In any event, her Honour, having been asked to do so by counsel for the appellant immediately after the jury retired, recalled the jury in order to redirect them in relation to inferences. She told the jury that some of the terminology she used earlier "may well have been a little confusing" (AB 426). She stated the matter in a number of slightly different ways, but all to broadly the same effect, then summarised what she had said by concluding at AB 426:
" … so basically an inference of guilt can't be drawn from the surrounding circumstances unless the circumstances that you find to be the case or to prevail exclude any reasonable hypothesis that's consistent with innocence and again the guilt of any accused person must be established beyond reasonable doubt and you must entertain such a doubt when any other inference consistent with innocence is reasonably open upon the evidence. So take that away with you insofar as it relates to the inferences that you may find in the circumstances of this case."
- Counsel for the appellant expressed himself to be extremely satisfied with the redirection.
24 For the reasons outlined above, I would dismiss this appeal.
25 PULLIN JA: I agree with the reasons and the order proposed by Wheeler JA. The following observations are by way of addition to her Honour's reasons.
26 In relation to ground 1, counsel for the appellant said in his oral submissions:
"… if there is to be deceit by concealment … the jury [should] … in fact be instructed that that deceit by concealment would only arise where the person from whom the information was concealed was entitled to know what had been concealed."
27 Implicit in that submission is that the appellant was under no duty to disclose what had been concealed about Wire Couriers. When pressed by
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- members of the Bench on the point, counsel added, in the alternative, that the question of whether there was a duty was a question of fact which should have been left to the jury.
28 In my opinion the only relevant question of fact concerned the relationship between the appellant and his employer. That fact was not in dispute. The appellant was an employee. He was the Regional Manager in Western Australia of the Edments stores owned by his employer. That fact not being in dispute, it followed as a matter of law that the relationship between the appellant and his employer was a fiduciary relationship. See Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 96. A person in a fiduciary relationship is under a duty not to improperly use his position to gain an advantage for himself: WA Forklift Distributors Pty Ltd v Jones [2003] WASC 102 at [54]; Digital Pulse Pty Ltd v Harris (2002) 166 FLR 421 at [29] - [30].
29 If a person occupying a fiduciary position wishes to enter into a transaction which would otherwise amount to a breach of duty, he must make full disclosure to the person to whom the duty is owed of all relevant facts known to the fiduciary, and the person must consent to the fiduciary's proposal: Parker v McKenna (1874) LR 10 Ch App 96; DPC Estates Pty Ltd v Grey & Consul Development Pty Ltd [1974] 1 NSWLR 443 (not affected on this point on appeal to the High Court).
30 In my opinion the trial Judge correctly directed the jury members that they had to consider whether there was "transparency" and "was there openness" meaning was there disclosure by the appellant. Her Honour correctly identified the case as being that the appellant "deliberately concealed who Wire Courier was" (411). The appellant in written submissions suggests that the "absence of informed choice, transparency and openness do not necessarily establish deceit or fraudulent means". I disagree. Wheeler JA has explained what "deceit" means. The presentation of invoices induced the appellant's employer to believe that these were invoices which would result in payment to an independent contractor. This was false. The payments would be made not to an independent contractor but to the appellant.
31 I also agree with Wheeler JA's comments about the meaning of the phrase "fraudulent means".
32 This phrase came in as part of the new s 409(1). This section was introduced into the Criminal Code by s 24 of the Criminal Law Amendment Act 1990. In the Second Reading Speech in the Assembly,
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- the Minister said that the government had implemented a large proportion of recommendations of the Murray Review of the Criminal Code. Under the heading "Fraud and Computer Crime" the Minister said:
"The Bill proposes to add to the code a new general fraud offence. The purpose of this is to modernise and broaden the coverage of existing offences in this area. The new offence is formulated by drawing on amendments to the law made in the United Kingdom and other Australian jurisdictions while at the same time retaining the best features of our code. Under the provisions of the present Bill it will be unlawful for any person, with intent to defraud, to do any of the matters specified in proposed new section 409." (I have added italics for emphasis).
"A conspiracy to defraud may be made out on proof of an agreement by fraudulent means to inflict economic loss upon an individual or deprive him of an advantage; Scott v Metropolitan Police Commissioner [1975] AC 819 at 839, 841. A conspiracy to defraud may also be made out on proof of an agreement by fraudulent means to cause a public official to act contrary to his public duty even though no question of economic loss is involved; Scott at 841 … Fraudulent means is made out on proof of dishonesty in any form: Scott at 839, 841." (I have added italics for emphasis).
34 The example of a person gaining access to a theatre, to which Wheeler JA refers is a good example of the gaining of a benefit not by deceit (because no representation is made) but by fraudulent means.
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