Loone v Tasmania
[2008] TASSC 7
•25 February 2008
[2008] TASSC 7
CITATION: Loone and Loone v Tasmania [2008] TASSC 7
PARTIES: LOONE, Peter John
LOONE, Malcolm James
v
STATE OF TASMANIA (THE)
TITLE OF COURT: COURT OF CRIMINAL APPEAL (TAS)
JURISDICTION: APPELLATE
FILE NO/S: CCA 9/2007
DELIVERED ON: 25 February 2008
DELIVERED AT: Hobart
HEARING DATES: 14 August, 15 November 2007
JUDGMENT OF: Underwood CJ, Slicer and Evans JJ
CATCHWORDS:
Criminal Law – Appeal and new trial and inquiry after conviction – Particular grounds – Unreasonable or unsupportable verdict – Where appeal allowed – Dishonestly acquiring a financial advantage – Elements in crime – No evidence of pleaded deception.
Criminal Code (Tas), s252A.
M v R (1994) 181 CLR 487, applied.
Aust Dig Criminal Law [962]
Criminal Law – Appeal and new trial and inquiry after conviction – Practice after criminal appeal legislation – Power to order new trial or quash conviction and direct entry of judgment of acquittal – Particular cases – New trial granted – When verdicts set aside on ground of unsafe or unsatisfactory.
Criminal Code (Tas), s404(1).
Gipp v R (1998) 194 CLR 106, applied.
Giam v R (1999) A Crim R 416; Cheatley v R [1981] Tas SR 123, referred to.
Aust Dig Criminal Law [1029]
REPRESENTATION:
Counsel:
Appellants: G A Richardson
Respondent: K Brown
Solicitors:
Appellant: G A Richardson
Respondent: Director of Public Prosecutions
Judgment Number: [2008] TASSC 7
Number of Paragraphs: 105
Serial No 7/2008
File No CCA 9/2007
PETER JOHN LOONE and MALCOLM JAMES LOONE
v THE STATE OF TASMANIA
REASONS FOR JUDGMENT COURT OF CRIMINAL APPEAL
UNDERWOOD CJ (Dissenting in part)
SLICER J
EVANS J
25 February 2008
Order of the Court:
In the case of Peter John Loone, the convictions on counts 3, 4 and 6 be quashed and there be a new trial of those counts in the indictment.
In the case of Malcolm James Loone, the convictions on counts 3 and 4 be quashed and there be a new trial of those counts in the indictment.
Serial No 7/2008
File No CCA 9/2007
PETER JOHN LOONE and MALCOLM JAMES LOONE
v THE STATE OF TASMANIA
REASONS FOR JUDGMENT COURT OF CRIMINAL APPEAL
UNDERWOOD CJ
25 February 2008
An introduction
The appellants are brothers. Mr Peter Loone is the younger of the two. They were both employed by Holymans Limited, a transport company. In 1999 Patrick Corporation purchased the Holyman group of companies, including one which was subsequently renamed Patrick Tasmania.
The appellants were employees of Holymans Limited at the time of the takeover. After the takeover they were both employed by Patrick Tasmania, Mr Peter Loone as the company's general manager and Mr Malcolm Loone as its national purchasing officer.
The appellants were arraigned upon an indictment that charged them both with 12 counts of dishonestly obtaining a financial advantage. The complainant on count 1 was Holyman Limited. The pleading alleged that the crime was committed on 28 September 1999. The complainant on the remaining eleven counts was "Patrick's Tasmania Ltd" [sic]. The indictment alleged that these eleven crimes were committed on different dates between 15 February 2001 and 14 April 2003. Eleven of the counts alleged that the dishonestly acquired financial advantage was related to a boat called "Sobraon". This boat belonged to Mr Peter Loone. Count 5 alleged that the financial advantage related to a boat owned by Mr Steven Wallace, another employee of Patrick Tasmania. Counts 1 to 4 inclusive, and 6 and 7, concerned work done to, and materials for, Sobraon, and count 5 related to work done and material supplied to Mr Wallace's boat. Counts 8 to 12 inclusive concerned fuel alleged to have been supplied to Sobraon.
Each count pleaded that each appellant "by means of a deception, namely by invoicing Patrick's Tasmania Ltd for …" and in each case there follows a few words describing the work done and materials supplied or fuel delivered, and the value of the financial advantage alleged to have been acquired.
The nub of the Crown case was that the work done, the materials supplied, and the fuel delivered, were all paid for by Patrick Tasmania but should have been paid for by Mr Peter Loone.
At trial, neither appellant disputed that Patrick Tasmania made the payments, but each denied any dishonesty. Put shortly, the defence case was that Sobraon was used for the purpose of entertaining staff and clients of Patrick Tasmania, and Mr Peter Loone made no charge for such use. From time to time he "arranged" for Patrick Tasmania to pay for work done and fuel and materials supplied as a "contra" for hire charged. It was claimed that it was within his general authority as manager to do that. The defence with respect to count 5 was different, but as there was no finding of guilt on that count there is no need to refer to the facts relevant to it.
The outcome of the trial
Both appellants were found guilty of counts 3 and 4. Mr Peter Loone was additionally found guilty of count 6. With respect to all the other counts the appellants were found not guilty, in some cases as a result of a direction to that effect by the learned trial judge.
The evidence on counts 3, 4 and 6
Counts 3, 4 and 6 each allege that Mr Peter Loone and Mr Malcolm James Loone "by means of a deception, namely by dishonestly invoicing Patrick's Tasmania Ltd [for maintenance – count 3], [for labour and parts – count 4], [for an electronic marine synchroniser – count 6] for the vessel Sobraon [they] dishonestly acquired a financial advantage of [$1,372.52 – count 3], [$10,819.70 – count 4], [$2,079 – count 6]".
The Crown called evidence from a Mr Criggie. He said that he is the manager of "Cummins Diesel" and had been so for the preceding 10 years. Documentary evidence tended to show that he was in fact the manager of "Cummins Engine Co Pty Ltd" ("Cummins"). He told the jury that he had a working relationship with both appellants and knew Mr Peter Loone's boat Sobraon. After giving that evidence, counsel for the Crown immediately took Mr Criggie to a number of invoices all with a printed letterhead, "Cummins Engine Co Pty Ltd".
The first invoice (P1) related to count 1 and is dated 24 September 1999. It is addressed to "Patrick Tasmania". It relates to a service on the two marine engines in Mr Peter Loone's boat. On its face the invoice states:
"Inspect marine engines as requested. Carry out service on both main engines including valve adjustments. Fit new lift pump to onan gen set and new fittings. Replace burnt control cable and check operation. Replace anodes in engine raw water systems".
Amongst the parts supplied, the invoice lists five "plug zinc electr", being a reference to zinc anodes that are only fitted to boats. P2, dated 28 September 1999, is a credit note for the full amount of invoice P1. P3, also dated 28 September 1999, is an invoice addressed to Patrick Tasmania for the same amount as that claimed by invoice P1, but on invoice P3, there is no reference to "marine engines", just "engine", and the words "plug zinc electr" have been replaced by the word "fittings". Mr Criggie said that Mr Malcolm Loone requested the service and after the work had been done, he telephoned Mr Malcolm Loone for an order number to put on the invoice addressed to Patrick Tasmania. The invoice was sent by Cummins to Patrick Tasmania. Counsel for the Crown asked Mr Criggie why the invoice was credited and a slightly different invoice issued for the same amount, and he explained that the second invoice removed references to parts that were only used in connection with a marine engine, such as the plug zinc electrodes. Mr Criggie later said that it was Mr Malcolm Loone who told him that the first invoice (P1) "wasn't satisfactory" and accordingly, he raised the credit and issued the new invoice P3. No further evidence was led as to what Mr Malcolm Loone said to Mr Criggie that led to the latter raising the credit and changing the words of the replacement invoice so that it would not appear as though work had been done on a marine engine. Mr Criggie was not cross-examined about this matter. Although there was a directed acquittal on count 1 with respect to both appellants, I refer to this evidence, because, as will be seen, it was relevant to count 3 in respect of which there was a finding of guilt, a finding that the appellants claim was unsafe or unsatisfactory.
The evidence of Mr Criggie with respect to count 3 was along the same lines as that given with respect to count 1. There are six pieces of paper relevant to count 3:
· P5 is a Cummins invoice addressed to Patrick Tasmania and "W Holyman & Sons Pty Ltd". It relates to engine number 44885947. The total amount for the invoice is $742.80. It refers to service and parts. Parts include five zinc electrodes. The invoice is dated 28 March 2002.
· P6, dated 9 April 2002, is a credit note for P5.
· P7 is dated 28 March 2002 and is an invoice relating to engine number 44885665. The total amount of the invoice is $629.72. It refers to service and parts and the parts include three zinc electrodes.
· P8 is a credit note for P7 dated 9 April 2002.
· P9 is also dated 9 April 2002. The amount of this invoice equals the total amount of invoices P5 and P7, but it makes no reference to "plug zinc electr" and the amounts charged for those parts in the earlier two invoices are listed against "parts".
Crown counsel led evidence from Mr Criggie with respect to the above exhibits and tendered them. She did not then proceed to lead evidence from Mr Criggie as to why he had raised the credits and issued fresh invoices for the same amount, omitting therefrom all reference to anything that would indicate that work had been done on a boat engine or engines. Instead, Crown counsel moved straight on to lead evidence with respect to count 4 and then count 6. I regret setting out all this detail, but it is necessary to do so otherwise a short passage in Mr Criggie's evidence to which I wish to refer will not be understood.
Count 4 concerns another invoice (P10). It is dated 25 June 2002. The letterhead belongs to Cummins and the invoice is addressed to Patrick Tasmania. It comprises three pages and is for a total of $38,531.53. It commences, "As quoted your order No 13576" and there follows a detailed description of repair work done on, and parts supplied to, a fork lift truck belonging to Patrick Tasmania. Amongst the detail there appears an entry, "3349230 – Vibration isolat (4), $1,492.20". In his evidence, Mr Criggie said that was a reference to "rubber mounts that's under a marine engine to stop it vibrating through the boat". Also listed in the invoice is "7406471 – supply controls (1) $8,400". Mr Criggie's unchallenged evidence was that that entry was a reference to supply controls for a boat. He said that he ordered the controls at the request of Mr Malcolm Loone who rang him from a boat show in Queensland and asked him to order and install the controls in Mr Peter Loone's boat. He said that in the course of the conversation, Mr Malcolm Loone told him that he was at the boat show with Mr Peter Loone and some others. Mr Criggie's evidence was that as a result of Mr Malcolm Loone's phone call, he ordered the controls "and some additional controls".
The additional controls are the subject of count 6 and invoice P11. This invoice is dated 11 March 2003. Again it appears on a Cummins letterhead, although the format of the invoice is a redesign of earlier invoices. It is addressed to Patrick Tasmania. It reads:
"Sundry sundry charge [sic].
Repairs to fuel pump and injectors $1,890"
Mr Criggie told the jury "that was additional components for the controls … for Peter's boat".
The following comprised the only evidence-in-chief led by counsel for the Crown with respect to why Mr Criggie "buried" the cost of goods supplied to, and work done, on Mr Peter Loone's boat in invoices addressed to Patrick Tasmania:
"You've given evidence about invoices being raised, credited and subsequently altered?……….Yes.
At whose instigation was that?………..Mine. Yes.
Well did you, so you arranged for that to be done as a consequence of what?………….As a call from Malcolm to, at the very start to, say from the first invoice, to change that.
Okay. And in relation to, in terms of the system, it was, is it fair to say it was the same except for P10, the one relating to the forklift?………….Yes that's right.
And P10 the forklift relates to a legitimate job but these other things have been added on?………….The extras were put on, yes.
Thank you your Honour that's the evidence."
The Crown called evidence from a Ms Leyton. She said that she was employed by Patrick Corporation for seven years. She said that she "started off in Payroll and Creditors, and by the time [she] had finished [she] was the administration manager". Just what she meant by that was not made clear. The balance of her evidence leads me to suspect that she was employed by Patrick Tasmania, ultimately as manager of its accounts department.
Ms Leyton said that once a month she printed out cheques to pay accounts for debts incurred by Patrick Tasmania. She said that before payment, all invoices were approved by Mr Malcolm Loone in the first place and by Mr Peter Loone in the second place. She said, in effect, that the amount of each invoice payable was entered in the company's accounting records, classified by a number, depending upon the nature of the expense.
Ms Leyton looked at a copy of invoice P10 (count 4). This copy bore an authorisation stamp. She said that Mr Malcolm Loone's initials, and Mr Peter Loone's signature appeared on the invoice. Within the stamp, someone had written "74900" and "33000". Mysteriously, the witness said that they were two classification codes:
"One is an operating unit of thirty three hundred. Which was for head office. Each of the states, because we operated in different states, all had its own operating unit or its own code. And the seven four nine hundred is an account for prepaid insurance."
There was no further elucidation of that and no evidence from her as to who put the numbers on the authorisation stamp.
Ms Leyton was also shown a copy of P11 (count 6). It, too, bore an authorisation stamp. She said that the copy invoice carried the signature of Mr Malcolm Loone and a Mr David Mallet. She said that the latter was the administration and finance manager. On this invoice, the stamp bore the written codes "37100" and "33700" and under the heading "D'ment", was the number 100. There was no evidence about the last number, but Ms Leyton said that 37100 was for repairs and maintenance. None of this evidence was challenged in cross-examination.
There was other evidence to the general effect that it would have been within the scope of Mr Peter Loone's authority to hire his boat to entertain his employer's staff and/or clients, and he would have been entitled to receive reasonable reimbursement for this upon submitting an appropriate invoice or account.
Mr Peter Loone gave evidence, but Mr Malcolm Loone did not. The thrust of Mr Peter Loone's evidence was that his boat was used to entertain clients and/or staff of, initially, "Holymans" and later, Patrick Tasmania, and that both companies paid for their use of the boat by paying for some of the boat's fuel and repairs. He gave evidence about a few of these boating trips. He explained:
"I would know roughly how many charters that we had at the time, they would, those charter numbers would accumulate, there may be one, two, three or four charters. If I had no repairs and maintenance on the boat or no fuel to put in, I'd wait until there was some and then I'd instruct Malcolm to pay some bills to cover roughly my costs, not all my costs, some of my costs."
Clearly highlighting a need to separate the issues on the trial of Mr Peter Loone from those on the trial of Mr Malcolm Loone, counsel for the appellants asked Mr Peter Loone the following question and he gave the following answer:
"Okay, now you've heard evidence that in this case, that a alteration was made to invoices in a particular incident of, I think there might have been a couple of them. But there [sic ? where] alterations made to invoices, were you aware of at least in general terms, of that happening?.....I became aware of it when this trial commenced. What I understand is that because we had a fleet management system in place, all parts for vehicles, trailers, trucks etc would have to go into that fleet management system, and would require a fleet number. Obviously the boat didn't have a fleet number, so they altered the, obviously altered the invoice to –."
No one at the trial seemed to concern themselves about the relevance and/or admissibility of that evidence.
Of critical importance is this piece of Mr Peter Loone's evidence-in-chief:
Did you, yourself, ever speak to Mr Criggie, the man who gave evidence a couple of days ago, about the supply of any particular item to your boat? ……No.
Did you, yourself, ever, well, if you didn't speak to him about the supply of anything, did you speak to him about any invoices? ……I have not spoken to Rob Criggie in regard to anything, about any invoices what so ever."
Mr Peter Loone denied writing any accounting code numbers on any of the exhibit invoices. In cross-examination he said, without reference to any particular invoice or account, that he would tell his brother "to organise payment in relation to monies associated with costs for [his] boat … when it matched up to the number of charters and the fees that would have been charged normally."
With respect to count 4, Mr Peter Loone agreed that he had been at a Queensland boat show with his brother and that he had asked his brother to call Mr Criggie to "organise" the controls. With reference to payment for the controls about which he had asked his brother to speak to Mr Criggie, counsel then asked Mr Peter Loone:
"And asked Malcolm where the invoice in relation to that was?....I told Malcolm to pay that invoice when it came in.
Right, you just didn't want to see that at all? You sorry, you-?......He probably raised it with me, that invoice at the time, I can't remember."
There this matter rested.
Mr Peter Loone denied that he had instructed his brother to get any invoices changed so that they did not, on their face, disclose that work had been done on a marine engine. Developing his earlier, inadmissible evidence, he said that his understanding was that the invoices were altered because records of all Patrick Tasmania's vehicles, and (as I understand the evidence) their parts, had to be entered into a fleet management system. This was a record of the maintenance on equipment belonging to Patrick Tasmania. It was electronically separate from the accounting system. As I understand the evidence, each vehicle and perhaps each part, had an identifying number, and because neither the boat nor the marine parts supplied for it had a Fleet Management number, the invoice had to be altered so that entries could be made in the fleet management system. There was no direct evidence that Mr Peter Loone had anything to do with the alterations to the invoices.
The notice of appeal
Both appellants joined in a single notice of appeal. The only ground, relied upon by both of them, is that the convictions are unsafe or unsatisfactory.
The written submissions filed on behalf of the appellants did not comply with Practice Direction No 6/2005 which relevantly provides:
"Where a ground of appeal against a conviction is to the effect that the weight of the evidence was such that a jury properly instructed would not have returned a verdict of guilty or that the verdict was unsafe and unsatisfactory, written submissions shall identify the ingredients of the crime in respect of which it is alleged proof was deficient and the evidence relating to those ingredients and particularise the deficiencies of that evidence."
At an early stage of the appeal hearing the Court asked counsel for the appellants to identify the element or elements of the crimes in respect of which each appellant had been found guilty and with respect to each such element or elements, where had proof been deficient. This he could not do. It shortly became clear that neither counsel for the appellants nor counsel for the respondent had properly turned their minds to the identification of the conduct that was relied upon at trial to constitute the dishonest deception. No one at trial appeared to have considered the separate elements of the crimes charged. All the attention seemed to have been focussed on the issue of dishonesty. The elements of the crimes in respect of which there were findings of guilt were:
(1) the appellant Mr Malcolm Loone;
(2) by a deception;
(3) dishonestly;
(4)acquired a financial advantage for himself or another.
And, that the appellant Mr Peter Loone instigated him to commit the crime.
The Code, s252A(2), provides:
"For the purposes of subsection (1) 'deception' means any deception (whether deliberate or reckless) by words or conduct as to fact or as to law, including a deception as to the present intentions of the person using the deception or of any other person."
The indictment, upon which the jury returned its verdicts, pleaded the deception as "Invoicing Patrick's Tasmania Ltd for [maintenance of the vessel Sobraon – count 3], [labour and parts for the vessel Sobraon – count 4] and [for an electronic marine synchroniser for the vessel Sobraon – count 6]". Thus, before the jury could convict either appellant on counts 3, 4 and 6, it had to be satisfied beyond reasonable doubt that Mr Malcolm Loone invoiced Patrick Tasmania.
During the course of submissions on the hearing of the appeal it became apparent that errors of law attended the summing up. Counsel for the respondent conceded that this was so. As the notice of appeal relied on the single "unsafe or unsatisfactory" ground, it was decided to adjourn the further hearing to give counsel for the appellants an opportunity to consider whether he wanted to amend the notice of appeal to plead error of law. Upon the resumption of the hearing of the appeal, counsel for the appellants declined to make any application. He submitted that Gipp v R (1998) 194 CLR 106 was authority for the proposition that verdicts were unsafe or unsatisfactory if they were tainted by errors of law that resulted in a miscarriage of justice. I doubt whether Gipp is authority for that proposition, but as events have turned out it is unnecessary to go into that question. However, in case this notion gathers momentum and in result, appellate pleading is, in all cases, reduced to the single ground of unsafe or unsatisfactory, it is useful to look at M v R (1994) 181 CLR 487, confirmed by the majority in Jones v R (1997) 191 CLR 430, and at a very helpful decision of the Full Court of the Federal Court in Tran v R (2000) 118 A Crim R 218. For my part, I should add that it is important to remember that an appellate conclusion that a verdict is unsafe or unsatisfactory does not necessarily result in an acquittal. The Code, s404, clearly gives the Court a power to order a new trial regardless of the ground that established the miscarriage of justice. Naturally if the miscarriage is of the kind referred to in M v R, the only proper outcome is an acquittal, but if an error of law causes a verdict to be unsafe or unsatisfactory and a miscarriage of justice, then a retrial is usually the appropriate order.
The trial
The trial was muddled from start to finish. In her opening, counsel for the Crown did not identify the words or conduct as to fact or law of either appellant upon which the Crown relied as the deception within the meaning of the Code, s252A. She did not use the word "deception" in her opening address at all. She referred to Mr Malcolm Loone requesting that marine references be removed from the invoices and trying to hide the costs in invoices so as not to raise suspicion. In the opening address, counsel for the Crown did not mention that Mr Peter Loone was alleged to be an instigator of the crime, and Mr Malcolm Loone the principal offender. With respect to the Crown case against Mr Peter Loone, Crown counsel opened to the jury:
In terms of Mr Peter Loone's involvement, our case is that he was in charge of Mr Loone, he gave them [sic] directions, he's orchestrating all of this and he was responsible, day to day, for authorising invoices. So he was giving Mr Malcolm Loone directions about going to organise these things and that's how he was involved. He was organising it passing the invoices for payment that he knew weren't right and knew the way in which they could be altered so that detection could be difficult."
There was no identification of the conduct it was alleged Mr Peter Loone instigated. I pause to observe here that if the relevant conduct was invoicing Patrick Tasmania, then Mr Peter Loone could not have instigated the commission of the crime because he could not have authorised an invoice until after Patrick Tasmania had been invoiced. In his reply to the Crown opening, counsel for the appellants did not use the words "deception", "instigate" or "instigator". He told the jury that a lot of facts were agreed, including that Cummins did work on, and supplied parts for, Mr Peter Loone's boat. He said that it was also agreed that the cost of doing this work was paid by Patrick Tasmania. He told the jury that the issue in the case was whether the appellants had acted dishonestly or not.
At the end of all the evidence, the learned trial judge gave counsel a draft of a written memorandum that she proposed to hand to the jury. There was a discussion about its content. Relevant to counts 3, 4 and 6, the learned trial judge said that she understood the Crown case to be that the deception carried out was:
"… namely dishonestly invoicing Patricks. Peter Loone instigated the deception, Malcolm aided Peter Loone in carrying out the deception, the deception being the invoices etc."
At this stage, it would appear that her Honour confused two concepts, for she went on:
"So there's an instigator in a sense in Peter Loone, but from that point on to varying degrees, they aided each other in putting - carrying out - the deception."
The written memorandum was settled and I shall refer to it shortly. Meantime, in his closing address for Mr Peter Loone, counsel for the appellants told the jury that the work was done on the boat, Patrick Tasmania paid for that work, and thus Mr Peter Loone received a financial advantage but, "there was no deception and no dishonesty". He said:
"This whole case really hinges on the issue of whether or not there was a deception; whether or not there was dishonesty."
At no stage in this closing address did counsel for the appellants identify the conduct to which he was referring and which was alleged by the Crown to have been the relevant deception. Throughout, counsel appeared to draw no distinction between the words and/or conduct constituting the deception and the alleged dishonest state of mind.
The closing address on behalf of the Crown comprised almost wholly general statements. No reference was made to the conduct which constituted the act of deception relied upon by the Crown in the case of each count in respect of which there was a finding of guilt.
The written memorandum was given to the jury early in the learned trial judge's summing up, At that stage, her Honour simply asked the jury to have regard to the last page which set out the possible verdicts that could be entered. Early in her oral directions the learned trial judge told the jury that, "This whole case really hinges on the issue whether or not there was a deception; whether or not their was dishonesty." It was an error to equate the element of deception with the element of dishonesty. The jury had to be satisfied that there was a deception and that it was dishonest. Her Honour correctly told the jury that "the Crown have to prove each element of each charge" and then said, "I'll come back to it in a minute, but the memorandum that I have given you sets out what the charge is and some elements of it" [emphasis added]. After referring briefly to the parts of the written memorandum that firstly set out matters relating to the burden and standard of proof and secondly, the provisions of the Code, s152A, her Honour referred to what she had written with respect to accessorial liability. She said:
"The next heading is 'Liability for crimes' and that again sets out a section of the Criminal Code which deals with the way in which somebody can be found criminally liable for a matter. And in this particular case the Crown's case is basically that Peter Loone instigated or initiated or was the driving force behind these arrangements and his brother, Malcolm Loone, helped him to varying degrees to carry it all out. That's in very simple terms what the Crown's case is."
That direction was erroneous. It does not provide a proper direction about what evidence could, as a matter of law, constitute instigation. There can be no instigation unless the jury is satisfied, upon evidence admissible on the trial of the alleged instigator, that another committed all the elements of the crime charged. It was misleading to refer to the commission of the crime by the principal offender as "these arrangements". Further, the jury needed to be told that they also had to be satisfied that the instigator knew the essential facts of the crime which it is alleged he instigated. See Giorgianni v R (1985) 156 CLR 473, per Gibbs CJ at 479. Appropriately, the substance of the Code relating to the liability of an instigator, s3(2), was set out in the memorandum, but it is a contradiction in terms to instruct the jury that Peter Loone instigated the crimes and that his brother "helped him to varying degrees to carry it all out." [emphasis added.] Still referring to the written memorandum, her Honour continued:
"So I've then set out on the next page the matters that you need to be satisfied about for you to be able to convict the accused, or either of them, in respect of the various charges. So at this stage I'm not going to go through those but what I will do is give you an opportunity a little later to read it and if you have any queries you want answered before you retire we'll try and deal with them."
Relevantly, the next page read as follows:
"To Convict of Dishonestly acquiring a financial advantage
10The jury must consider each count separately. While certain evidence may be common to all charges, to convict in respect of each count the jury must be satisfied beyond a reasonable doubt that the Crown has established the elements of each charge.
11The Crown must prove beyond a reasonable doubt that
- in respect of each accused and each charge on the indictment,
- they either carried out a deception personally or instigated the other to carry it out,
- when the deception was carried out it was intended to achieve a dishonest purpose (in this case to obtain a benefit from their common employer for themselves or others they were not authorised to have)
- as a result of the deception, one or other of the accused or a third person obtained a financial advantage.
12Therefore you need to be satisfied beyond reasonable doubt in relation to each of counts 2, 3, 4 and 6 on the indictment that
- on each of the occasions referred to,
- a deception was carried out namely 'dishonestly invoicing Patrick's Tasmania Ltd'
- Peter Loone instigated the carrying out of that deception,
- Peter Loone and Malcolm Loone aided each other to different degrees in the carrying out of that deception
(deception being that invoices for the work done on or parts ordered for Peter Loone's private boat were sent to Patricks [sic] to be paid in circumstances where it was known the invoices were not properly the responsibility of Patricks [sic]
- the deception was carried out dishonestly in that it was intended to have Patricks [sic] pay for the work and parts when it would otherwise not have done so
- as a result of the deception Peter Loone obtained a financial advantage in that he had work done on the boat or parts supplied for it for which he did not pay for."
"The fundamental obligation of the judge in a criminal trial is to explain the relevant law to the jury, and in particular to explain, by reference to the relevant evidence, the elements of the offence"; per Kirby J in Crampton v R (2000) 206 CLR 161 at 192, and cases cited there by his Honour. In my respectful view, this obligation is not discharged by merely handing the jury a written memorandum with the advice that it would not be explained or elaborated upon, but if on a later reading (which may or may not have happened in the case of every juror) questions asked would be answered.
The memorandum is confusing. It was never part of the Crown case that either appellant instigated or carried out the deception, as asserted in par11 of the written memorandum. Further, it was no part of the Crown case that each appellant "aided each other to different degrees in the carrying out of that deception". It is unclear to which count and to what conduct her Honour was referring when she wrote that in par12 of the memorandum. With respect to the alleged secondary liability of Mr Peter Loone, the written memorandum does not make it clear that in the case of counts 2, 3, 4 and 6, the jury had to first be satisfied to the requisite degree, that Mr Malcolm Loone engaged in the pleaded deception dishonestly, and that it caused Mr Peter Loone to acquire a financial advantage, before turning to consider whether knowing the intended acts that constituted the commission of the crime, Mr Peter Loone encouraged his brother to do those acts with a dishonest state of mind. It was erroneous to write that "Peter Loone and Malcolm Loone aided each other to different degrees in the carrying out of that deception" as it is not possible for a principal offender to aid himself to carry out an element in a crime. Elsewhere in the memorandum, the learned trial judge set out the terms of the Code, s3, including the part that defines instigation. However, there was no need to set out the section insofar as it referred to aiding and abetting, because aiding and abetting was not in issue on this trial. To have done this, and to have referred to aiding in her written memorandum, amounted to a misdirection.
It appears that her Honour equated evidence at the trial that indicated a dishonest intention by one or both appellants as parts of the deception, and in her summing up, this led to the fundamental failure to clearly identify the words or conduct as to fact or law alleged to have been the deception. Errors such as those just referred to are likely to result in an order for a retrial, regardless of the ground relied upon to identify it. However, as I have mentioned more than once, in the case of each count in respect of which there was a finding of guilt the indictment pleaded that the conduct constituting the deception was invoicing Patrick Tasmania. Further, in the written memorandum given to the jury the learned trial judge wrote:
"(deception being that invoices for the work done on or parts ordered for Peter Loone's private boat were sent to Patricks [sic] to be paid in circumstances where it was known the invoices were not properly the responsibility of Patricks)" [emphasis added].
Accordingly, it seems to me that, although partially obscured by the muddle, the case went to trial upon the basis that the deception was sending invoices to Patrick Tasmania. There is no direct evidence, nor evidence from which it might be inferred, that either Mr Malcolm Loone or Mr Peter Loone ever sent an invoice to Patrick Tasmania. So, even if there had been no error of law in the summing up, a properly directed jury ought to have entertained a reasonable doubt about the guilt of Mr Malcolm Loone on counts 3 and 4, and about the guilt of Mr Peter Loone on counts 3, 4 and 6, because there was no evidence to prove the existence of an essential element in the crime charged, viz, the deception relied upon. The evidence of Mr Criggie that Mr Malcolm Loone told him that the wording on the first invoice was not satisfactory was evidence that the jury might, together with the other evidence in the case, have regarded as a deception. More significantly, the jury might have regarded Ms Leyton's evidence on count 4, that the invoice bore Mr Malcolm Loone's initial and Mr Peter Loone's signature authorising payment, as a deception by both appellants. But none of this was part of the Crown case on the element of deception and certainly was not put to the jury as a deception relevant to any count.
The verdicts are all unsafe and unsatisfactory and should be quashed. I would not order a retrial. In lieu I would order that verdicts of acquittal be entered, in the case of Mr Malcolm Loone on counts 3 and 4, and in the case of Mr Peter Loone on counts 3, 4 and 6.
File No CCA 9/2007
PETER JOHN LOONE and MALCOLM JAMES LOONE
v THE STATE OF TASMANIA
REASONS FOR JUDGMENT COURT OF CRIMINAL APPEAL
SLICER J
25 February 2008
The appellants were jointly charged with 12 counts of dishonestly acquiring a financial advantage, contrary to the Criminal Code, s252A. The course of conduct was alleged to have occurred during the period September 1999 and April 2003. Peter Loone was the State Manager of Patricks Tasmania Ltd ("Patricks"), a component of a national company involved in the shipping and transport industry. Malcolm Loone, his younger brother, was employed by the company and was involved in the financial administration of the operation and reported directly to his brother.
The formulation of each count, which dealt with varying financial transactions, was in similar terms, namely that each, on an identified date:
"… at Devonport … by means of a deception, namely by dishonestly invoicing Patrick's Tasmania Ltd for [maintenance, parts or fuel] for [a] vessel 'Sobraon' … acquired a financial advantage."
Sobraon was a cruising yacht owned by Peter Loone. The common form of each count created legal complexities put to the jury by the parties which were replicated in the directions of the learned trial judge.
Peter Loone was convicted on three of the counts and his brother on two. It is necessary to identify each category of the claimed deceptive conduct in order to deal with one of the bases of the respective appeals.
Counts 1, 2 and 3 alleged the wrongful provision of maintenance for the Sobraon, at the expense of Patricks, on 28 September 1999, 15 February 2001, and 9 April 2002. Counts 4 to 7 related to the unauthorised supply of parts and the cost of their installation on 25 June 2002, 3 July 2002 and 11 March 2003, respectively. The remaining counts, 8 to 12, related to the provision of fuel for the vessel on various occasions between December 2001 and April 2003.
The case for the prosecution, as opened by counsel, was that Peter Loone as company manager:
"… took lurks and perks which he wasn't entitled to, and which weren't authorised by his bosses … and he used company money to keep the boat (inaudible) and parts – and to provide parts for that boat, and he just wasn't entitled to."
It was suggested that Malcolm Loone requested that Cummins Engine Co Pty Ltd, with whom Patricks had regular commercial dealings, to "do work on Peter Loone's boat". The method was that Malcolm Loone advised Robert Criggie, a financial officer employed by Cummins, to "just charge it to Patricks". An invoice would be raised by the provider and eventually paid by Patricks. It was the prosecution case that both the maintenance work was performed on, and parts purchased and installed, for the Sobraon in that manner. Counts 8 to 12 related to the purchase of fuel for the vessel without authority. The two appellants were said to have been responsible as the general manager and financial officer of the company. Counsel told the jury that:
"In terms of Mr Peter Loone's involvement, our case is that he was in charge of Mr Loone, he gave them directions, he's orchestrating all of this and he was responsible, day to day, for authorising invoices. So he was giving Mr Malcolm Loone directions about going to organise these things and that's how he was involved. He was organising it passing the invoices for payment that he knew weren't right and knew the way in which they could be altered so that detection could be difficult."
The defence case was that neither Peter Loone nor Malcolm Loone as general manager and company accountant respectively, had acted dishonestly. Peter Loone had authority to expend money on the boat as an offset or recompense for the use of the Sobraon for entertaining clients, suppliers and staff functions. No money was paid for formal hire, but an equivalent amount was credited through fuel and parts purchased, and general maintenance of the vessel.
Much of the evidence was not controversial and placed before the jury in documentary form. Patricks operated a Fleet Management System which provided a numbering system to identify items of machinery, and the "offsets" would be given a "debit number" which the supplier would use to create corresponding documentation and provide an invoice which would be processed and paid by the company.
Both appellants were acquitted, by a directed verdict of the learned trial judge, of counts 1, 5 and 7. Both appellants were acquitted by the jury of counts 2, and 7 to 12. Peter Loone was convicted on counts 3, 4 and 6. Malcolm Loone was convicted on counts 3 and 4, but acquitted on count 6.
The particulars of those counts respectively state:
"3 peter john loone and malcolm james loone on the 9th day of April 2002 at Devonport in Tasmania, by means of a deception, namely by dishonestly invoicing Patrick's Tasmania Ltd for maintenance of the vessel 'Sobraon', you dishonestly acquired a financial advantage of $1372.52
4 peter john loone and malcolm james loone on the 25th day of June 2002 at Devonport in Tasmania, by means of a deception, namely by dishonestly invoicing Patrick's Tasmania Ltd for labour and parts for the vessel 'Sobraon', you dishonestly acquired a financial advantage of $10819.70.
…
6 peter john loone and malcolm james loone on the 11th day of March 2003 at Devonport in Tasmania, by means of a deception, namely by dishonestly invoicing Patrick's Tasmania Ltd for an electronic marine synchroniser for the vessel 'Sobraon', you dishonestly acquired a financial advantage of $2079.00"
The sole ground of appeal for each appellant is that:
"… the jury's verdicts were unsafe and unsatisfactory in all the circumstances of the case."
Counsel for the appellants declined to amend the ground on the invitation of this the Court by adding any claim of specific error. He stated that he did so to avoid the consequences of a retrial in the event of success. The ground was advanced on two bases, namely:
(1)that the verdicts are inconsistent, illogical and present an affront to logic and common sense, making the verdicts unsafe or unsatisfactory;
(2)that on the whole of the evidence it was not open for the jury to be satisfied beyond reasonable doubt that the accused were guilty.
There is no merit in the first basis. The "fuel" counts, 8 to 12, could readily be accepted by the jury as coming within the authority and province of Peter Loone as general manager and his use of the Sobraon for the benefit of the company. Counts 1, 5 and 7, were directed verdicts based on the absence of evidence. There was specific and different evidence relating to the maintenance performed on the vessel in April 2002. The value of the parts provided and their installation amounted to over $12,000 and could well be regarded by the jury as being beyond the permitted authority and far exceeded the value of any service or facility provided by the general manager. The differing verdicts in relation to count 6 are consistent with a finding that although the request for installation of an expensive piece of technology made at a "boat show" was made by Malcolm Loone, it was done so at the specific request and authority of his brother who had thereby acquired a financial advantage.
The second basis was separate from the approach taken by the High Court in Gipp v R (1998) 194 CLR 106. In Gipp, the court held that a specific error identified at trial could, of itself, or at least in conjunction with other errors, result in an unfair trial and render the verdict unsafe and unsatisfactory.
Gipp is not authority for the proposition that any irregularity or error occurring at trial constitutes a basis for intervention by an appellate court on the basis that the verdict was accordingly made unsafe and unsatisfactory. As McHugh and Hayne JJ pointed out in their joint judgment at pars54 – 56:
"Nevertheless, criminal proceedings could not retain their adversarial nature if it were the duty of trial judges and courts of criminal appeal to take every step that they thought was appropriate to protect the accused's interests at the trial or on appeal. It is one thing to say that, when all the evidence is in, a trial judge has a duty to direct the jury that they must consider a matter that the accused has not raised in his or her defence. It is not surprising that, in furtherance of the requirement that there should be a trial according to law, appellate courts modified the adversary system to impose this duty on trial judges. The trial judge has heard the evidence. It therefore imposes no great burden on the judge to require him or her to direct the jury on all 'defences' that are legally open on the evidence.
But it is quite a different matter to say that an appellate court has a duty to examine the whole record and determine whether that record contains error requiring the quashing of the accused's conviction notwithstanding that the appellant has not relied on an issue or on evidence. Courts of criminal appeal would no longer be courts of appeal; they would be tribunals for the judicial review of criminal convictions. Their role would cease to be that of an appellate court deciding issues selected by the Crown and the accused. They would necessarily become active parties in the proceedings; the members of an appellate court would become judicial ombudsmen whose function was to investigate the records of criminal trials to determine whether convictions should be set aside because of some factual or legal error on the part of the trial judge whether or not the appellant had raised the error. Inevitably, the investigatory function of the 'court' would break down the doctrine of separation of powers and result in appellate courts becoming part of the executive branch of the State, as they effectively are in many jurisdictions that reject the adversary system of justice.
Such a change in the nature of criminal proceedings in this country would also have consequences in this Court whose jurisdiction to hear appeals is given by s 73 of the Constitution. The appellate jurisdiction of this Court is premised on two basic propositions. First, an appeal to this Court is an appeal in the strict sense and not an appeal by way of rehearing (Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73; Mickelberg v The Queen (1989) 167 CLR 259). That proposition has the consequence that the Court cannot admit fresh evidence on a civil (New Lambton Land and Coal Co Ltd v London Bank of Australia Ltd and Others (1904) 1 CLR 524; Ronald v Harper (1910) 11 CLR 63; Grosglik v Grant (1947) 74 CLR 355; Crouch v Hudson (1970) 44 ALJR 312) or criminal (Davies and Cody v The King (1937) 57 CLR 170 at 172; Mickelberg (1989) 167 CLR 259) appeal to the Court. If this Court decided an appeal on a ground that was not before the court from whose order the appeal is brought, the appeal would be by way of rehearing and this Court would be exercising original not true appellate jurisdiction (Werribee Council v Kerr (1928) 42 CLR 1 at 20 per Isaacs J; Davies and Cody (1937) 57 CLR 170 at 172). Appellate jurisdiction is conferred on this Court to determine only whether the judgment, the subject of the appeal, was correct on the materials before the court which gave that judgment (Ponnamma v Arumogam [1905] AC 383 at 388; Craig v The King (1933) 49 CLR 429 at 444; Davies and Cody (1937) 57 CLR 170 at 172; Mickelberg (1989) 167 CLR 259 at 267-268, 274, 298). Second, this Court can only make the orders that could have been made by the court from whom the appeal is brought."
In his reasons, Kirby J considered the practice approved by the High Court in M v R (1994) 181 CLR 487, of using the term "unsafe and unsatisfactory" was but a convenient shorthand and that it would be "preferable not to persist with it". It is not necessary here to consider in detail the exposition of either Kirby or Callinan JJ on this point since I am satisfied that the fundamental error of failure to specify the acts necessary to constitute deceptive conduct, as a causative matter, and to separate the issues as between differing counts over an extensive period of time constituted a significant matter which caused an unsatisfactory verdict. (See also Rabey v R [1980] WAR 85).
The Code, s402(1), provides:
"(1) On an appeal the Court shall allow the appeal if it is of opinion that the verdict of the jury should be set aside on the ground that it is unreasonable, or cannot be supported having regard to the evidence, or that the judgment or order of the court of trial should be set aside on the ground of the wrong decision of any question of law, or that on any ground whatsoever there was a miscarriage of justice, and in any other case shall dismiss the appeal."
Here there are at least three identifiable errors associated with the convictions. Neither appellant "invoiced" Patricks. The invoices were created by others external to the company, and apart from count 6, there was no evidence that a particular invoice was generated as a consequence of a particular statement, request or conduct by either appellant. The prosecution relied on a general course of conduct or practice without seeking to identify the conduct specific to the particular count. The Code, s252A, states:
"(1) Any person who by any deception dishonestly acquires for himself or for any other person any financial advantage is guilty of a crime.
Charge:
Dishonestly acquiring a financial advantage.
(2) For the purposes of subsection (1) 'deception' means any deception (whether deliberate or reckless) by words or conduct as to fact or as to law, including a deception as to the present intentions of the person using the deception or of any other person."
The prosecution was required to prove an act of deception as a matter of causation. The term "by means of deception" requires proof of some act, representation, or conduct which brings about a consequence. The indictment did not do so and the matter was not addressed by the prosecution at trial. The third identifiable error involves the claim by the prosecution that it would rely, without more, on the provisions of the Code, s3, to establish joint culpability. A general direction was given at the request of the prosecution that each appellant was culpable as an aider of the other. No specific acts of aiding or abetting were identified and no distinction made, as between counts or each appellant in the requisite directions. The jury was, in effect, involved in the conduct of 24 trials and given the acquittal directions required to consider eight matters in reaching five verdicts of guilty.
The jury was required to consider a number of discrete acts which might have involved instructions given by the first appellant to the second, or by either to another officer or employee of the company, the request, if any, to a supplier or provider of services separately in respect of each count and to agree, not on a general verdict based on general conduct, but unanimity of conclusion of the particular event of deception (R v Brown (1984) 79 Cr App R 115; R v More [1987] 1 WLR 1578; Infirri v R (1981) 5 A Crim R 132). In the last-mentioned case, Burt CJ (Wallace and Smith JJ agreeing), said at 134:
" ... two or more pretences can ... be laid in an indictment charging an attempt and it would be enough to sustain a conviction if one such pretence made with the necessary intent be proved. So in this case the appellant would be rightly convicted if the jury found each statement relied upon to be false and each made with the necessary intent or if they found one or other of them to have been false and to have been made with the necessary intent. But the question is, would it be enough to sustain a conviction that some but not all of the jury found one and only one of the statements to have been false and made with the necessary intent and the remainder of the jury found the other statement relied upon, and only that statement, to have been false and to have been made with the necessary intent.
Upon that question there is said to be no direct authority but the answer to it is, I think, clear. The cases say that it is enough to sustain a conviction if the making of one false pretence and for the purposes of the completed offence reliance upon it be 'proved' and that, I think, in the case of a trial by jury can only mean proved to the satisfaction of the jury. If the jury at the end of the day do not join in finding a particular false pretence to have been made then the making of that false pretence, as it seems to me, has not been 'proved'. The making of the false pretence is an element of the offence charged and proof of that element has not been achieved unless all members of the jury or, in the case of a majority verdict, ten of the jury join in saying so. It is different, of course, when the fact to be proved is not an element of the offence charged. So, to take an illustration from a recent case (Attorney-General's Reference No 4 of 1980 [1981] 2 All ER 617) if the element of the offence of manslaughter is that the accused caused the death of the deceased that element is 'proved' if the jury are all agreed that he caused the death but are not agreed upon or are unable to decide upon by which of two acts he did so."
It was the specific impropriety which caused or brought about the result, namely the obtaining of a financial advantage which required identification and consideration (Chew v R (1991) 4 WAR 21), a proposition not challenged in the ensuing appeal to the High Court (Chew v R (1992) 173 CLR 626).
The jury could be satisfied of the acquisition or obtaining of a financial advantage by Peter Loone but was still required to find in relation to each count, that it had been a result of an identified act of deception. In Fermanis v Western Australia (2007) 33 WAR 434, the Court of Appeal was required to deal with the convictions of two men, each convicted of counts of gaining a benefit "with intent to defraud, by deceit or fraudulent means". While the court determined that the wording of the statute did not require a particular form of deceit or fraudulent means relied on by the prosecution, it determined that the jury was required, in a general course of conduct encompassing the counts, to be unanimous in finding each ingredient proved which included the particular form of deceit or fraudulent means used in relation to each count. In considering how the charges had been formulated, Steytler P, with whom Roberts-Smith and McLure JJA agreed, stated at par69:
"In this case, each charge does not identify any particular form of deceit or fraudulent means. As I have said, there was no need for this to be done: cl 6(10) of Sch 1 of the Criminal Procedure Act. However, the State was, quite properly, required to give particulars of the deceit or fraudulent means relied upon. As I have made plain, it then identified, in the particulars, a number of different deceitful or fraudulent means, proof of any one of which would suffice to satisfy that essential ingredient of the charge. There was consequently a number of routes by which that essential element of the offence could be established. In my opinion, these routes were not merely evidentiary. Rather, the fact to be found, namely the particular form of deceit or fraudulent means used, is an essential ingredient of the offence and the jury was required to be unanimous in finding that ingredient proved. Of course, that does not mean that they had to be unanimous in their acceptance of evidence which led to that finding. So, for example, each accused could not properly be convicted in circumstances in which the deceit or fraudulent means was found by six of the jurors to be representation A, and by the other six to be representation B. They had to be unanimous in finding either or both of representations A and B proved. However, each might rely upon different evidence in finding that representation proved.
Any other conclusion seems to me to be objectionable in principle."
Turning to the way in which the prosecution had approached the case, he stated at pars72 and 73:
"That leaves the prosecutor's contention, mentioned earlier in these reasons, that the prosecution case was run upon the basis that the matters alleged in the particulars established a course of conduct by which the jury could be satisfied that each appellant had engaged in deceit or fraudulent means and that the particulars were consequently 'akin to the overt acts of a conspiracy, some of which may and some of which may not be established by the evidence'. In a conspiracy case the essential ingredient is the conspiracy to defraud and overt acts are particularised only for the purpose of identifying the acts upon which the prosecutor relies to invite the jury to infer that there was a dishonest agreement and that a particular defendant was party to it: Hancock [1996] 2 Cr App R 554 at 559 - 560 per Stuart-Smith LJ, speaking for the Court of Appeal; Walsh at [58] per Phillips and Buchanan JJA. However, no conspiracy was charged in this case and, for the reasons I have given, the prosecutor was obliged to prove one or other of the particular deceitful or fraudulent means alleged by the State in each case (see Infirri at 134; Walsh at [57]; KBT at 423). In any event, I would not be prepared to accept that the State ran its case in the manner suggested. Certainly, this was not the way in which the case was left to the jury by the trial Judge. He made it plain (without objection) that the State's case was based on a number of allegations in the alternative and that the jury could convict each appellant by different routes.
I am consequently satisfied that this is a case in which the trial Judge was required to direct the jury that in each case each of the jurors had to base his or her decision to convict on the same route or routes. Because that direction was not given, it seems to me to follow inevitably that the convictions are unsafe and should be set aside. I should add that there was, rightly, no submission on behalf of the respondent that this was a case for the application of s 30(4) of the Criminal Appeals Act 2004 (WA) (formerly the proviso to s 689(1) of the Criminal Code): see, in this respect, KBT at 424 - 425, 433 - 436."
Questions of alterations of codes, telephone conversations, methods of invoicing, referrals by or to other staff members and the arrangements which might or might not have differentiated between permitted or authorised use required careful directions in respect of the claimed acts of aiding.
The learned trial judge gave directions in accordance with the respective cases and in accordance with the approach taken at trial by counsel for the prosecution. The directions included:
"Now in relation to what I might call procedures for accounting the evidence of Ms Leyton who was the former Patrick's employee and Mr Davies was that if reimbursement for entertainment expenses was sought then a form needed to be completed and approved by a person's direct manager. If, for example, a hall were to be hired for a company function then it would be expected that an invoice would be presented and passed for payment. The issue in this case appears to be that at no time did Peter Loone commit any of the details of the arrangements relating to payment of boat expenses to writing. He said with hindsight he probably should have but he didn't. He said that what he did was that when there were a number of charters of the boat they'd been done and if he had an expense that needed to be paid for, for the boat, he would just have the company pay the invoice. And Peter Loone told you that he did not do anything dishonest, he didn't deceive anybody, he just continued a practice which was effectively started at Holymans and that he had authority to incur the expenditure without further approval.
…
Now the Crown says to you that the very nature of these transactions were such that they showed there was a deception and with dishonest intent because it seemed, they say, that Peter Loone was trying to hide these transactions. Peter Loone says of course, 'I didn't try and hide anything'. He says, 'I didn't alter any codes or invoices so they'd go through the system'.
And what the Crown says to you in relation to that is therefore you should ask yourselves well why were the body of certain invoices altered to remove references to marine items because there was also evidence that Holyman/Patricks didn't own a boat. So the Crown is asking you to infer that from the circumstances in which various invoices were raised and dealt with that they showed a deception was carried out and for a dishonest purpose, namely to have private boat expenses paid for by the company.
They're also asking you to infer from Peter Loone's role in the company and the fact that his signature appeared on authorisations in some part and from the fact that Lisa Leyton told you that he and his brother were the ones that authorised invoices for payment that he knew exactly what was going on, that he set it up, and that he was an active participant in this arrangement. But they are asking you to infer that from all those other facts because there is no direct evidence that Peter Loone did any of that. And as I said to you earlier where you are asked by the Crown to draw that sort of an inference in a circumstantial case as this is that inference has to be the only rational inference that can be drawn from the other facts that you've heard."
Her Honour provided a written memorandum which included directions concerning aiding, in the following terms:
"8The Code, s3, provides that where a crime is committed, different people can be found guilty of the crime. These include
- the person who actually committed it,
- every person who does an act or makes an omission for the purpose of enabling or aiding another person to commit the crime,
- every person who abets another person in committing the crime, and
- every person who instigates any other person to commit the crime.
9Any person who instigates another to do any act or make an omission, which had they done it themselves would have been committing a crime, is themselves guilty of that crime as if he or she had actually done the act or made the omission."
She correctly told the jury that it was a circumstantial case and the necessity for consideration to be given to each count, but in relation to the matters raised by the Code, s3, confined her directions to:
"The next heading is 'Liability for crimes' and that again sets out a section of the Criminal Code which deals with the way in which somebody can be found criminally liable for a matter. And in this particular case the Crown's case is basically that Peter Loone instigated or initiated or was the driving force behind these arrangements and his brother, Malcolm Loone, helped him to varying degrees to carry it all out. That's in very simple terms what the Crown's case is.
The direction did not identify the specific acts of deception required in relations to counts 3, 4 and 6.
Here no direction was given as to the requirement for the jury to be unanimous in finding that the telephoned request by Loone from the "boat show" was the means of deception employed by his brother. The learned trial judge put the case to the jury in the form as presented by the prosecution and directed it in relation to the question of dishonesty as advanced by the appellants. She quite properly put the respective cases as presented but the approach advanced by the prosecution was inherently flawed. A direction should be "custom built" to the particular case (Holland v R (1993) 67 ALJR 946), especially as here a general course of conduct governing specific transactions is relied on in support of the prosecution case.
The general ground is made out. In my opinion, the verdict was unsafe and unsatisfactory in the sense used in Gipp (supra). The conviction cannot be saved by the proviso (Weiss v R (2005) 224 CLR 300; R v Jaeschke [2007] SASC 321).
The question is disposition, in particular that of count 4. The evidence supportive of that count was clear and cogent. The equipment was expensive, and involved the installation of new controls. Mr Criggie, the manager of Cummins, gave evidence that he received an order for the installation, and included his company's claim for payment in a more general invoice totalling $38,531.53, and numbered 7412146 which related to the overhaul of a forklift engine. Invoice 7412146 comprises three pages and the same order number 13576 and job number 7412443. The evidence relating to the generation of that invoice was provided by Mr Criggie, who was led through his evidence in the following terms:
"ms brown (Resuming): If I can take you to 7412146, which is after the next blank page, you'll see on that there's a, in the bottom half there's a stamp. Did you have anything to do with placing that stamp on?………….No.
The document underneath that stamp is one of your invoices?………….Yes that's correct.
And in relation to this invoice, it says, well can you tell us what it says it's for?………….It's for a overhaul of an engine that's in a forklift at the, at Holyman's Patrick's. It's a V903 Cummins Engine, hence our repair.
On-. I'd ask that that be asked P-.
her honour: It's P10.
ms brown: 10 your Honour.
her honour: How many pages?
ms brown: Three.
her honour: Right. It's invoice number 7412146 will be P10, three pages.
exhibit #p10 – invoice no 7412146 – taken in
ms brown (Resuming): If I can take you to page 2 of that and the bottom entry on that page, the '3349230 vibration isolate for $1,492.20' can you tell me what that refers to?…………They're rubber mounts that's under a marine engine to stop it vibrating through the boat.
And if I can take you to the third page of P10? We have '7406471 supply controls one, eight thousand four hundred'. Can you tell us anything in relation to that?……….They are controls, but they're controls for the boat.
Okay. When you say 'the boat' which boat are you referring to?………..Yeah, Peter's boat.
And how is it that-? Did you order those parts?……….Yes I did.
At whose request?…………..At Malcolm's.
Was that in, did he request that in person or by way of a-?………..A telephone call.
On the telephone. Did he tell you where he was?………..Yeah, he was at Sanctuary Cove Boat Show.
Did he say who he was with? ……He was with Peter and some other people.
During that conversation, when he asked you to order these parts, was there a request to order any, anything else? ……We ordered the controls for Peter's boat and some additional controls as well, as a result of the phone call, yeah."
Additional control equipment was the subject of count 6. Miss Lisa Leyton was, at the time of count 4, the Administration Manager responsible for payroll and creditors. She identified the account as bearing the signatures of Malcolm Loone and David Mallet, and the invoice, as tendered, had been authorised by Peter Loone. Both appellants were found guilty on count 4 and it cannot be said that the verdict was unsafe or unsatisfactory in its own right or not open on the evidence. It might have been a product of error, but it is not of a nature which ought result in the quashing of the conviction and the substitution of a verdict of acquittal.
In Director of Public Prosecutions (Nauru) v Fowler (1984) 154 CLR 627 , the High Court said at 630:
"The power to grant a new trial is a discretionary one and in deciding whether to exercise it the court which has quashed the conviction must decide whether the interests of justice require a new trial to be had. In so deciding, the court should first consider whether the admissible evidence given at the original trial was sufficiently cogent to justify a conviction, for if it was not it would be wrong by making an order for a new trial to give the prosecution an opportunity to supplement a defective case ... Then the court must take into account any circumstances that might render it unjust to the accused to make him stand trial again, remembering however that the public interest in the proper administration of justice must be considered as well as the interests of the individual accused."
In R v Hiller (2006) 233 ALR 634, the High Court set aside an order of the Court of Appeal of South Australia which, having quashed a conviction for murder on the ground that the verdict was "unsafe and unsatisfactory", had declined to order a new trial since it had concluded that "there [was] a real possibility that another person was responsible". The case which was the subject of an appeal by the State was circumstantial. In their joint judgment, the majority, Gummow, Hayne and Crennan JJ, concluded at pars53 and 54:
"It has been said that this Court will grant special leave to the prosecution to appeal only in very exceptional circumstances R v Wilkes (1948) 77 CLR 511 at 516-517; R v Lee (1950) 82 CLR 133 at 138; R v Benz (1989) 168 CLR 110 at 111, 119-120, 131-132, 146. While it is clear that the Court has several times said it is, and should be, reluctant to grant special leave to the prosecution, it is not necessary to consider the exact content of the principle that underpins that reluctance.
Where, as here, the verdict of a jury has been quashed by an intermediate court of appeal, and it is demonstrated, as here, that that court reached its order by a path that was not in accordance with proper principle, it is in the interests of the administration of justice, both generally and in this particular case, that the error be corrected. Because the error that has been made will require that the whole case be reviewed to decide whether 'upon the whole of the evidence it was open to the jury to be satisfied beyond reasonable doubt that the accused was guilty' M v The Queen (1994) 181 CLR 487 at 494-495, the interests of justice will best be served by granting special leave to appeal, treating the appeal as instituted and heard instanter and allowed, setting aside the order of the Court of Appeal, and remitting the matter to the Court of Appeal for rehearing."
In a subsequent decision (Libke v R (2007) 81 ALJR 1309) the High Court, in dealing with the duties of an appellate court concerned with the fairness of a trial or procedural irregularity, dismissed the appeal despite a finding of error, but the dissenting justices, Kirby and Callinan JJ, did not suggest other than an order for retrial. In dealing with the claim of a "requirement of a retrial", they stated at pars60 – 63:
"The trial judge here defined intellectual impairment for the jury. It would have been better, however, if he had sought to relate each of the necessary components of the definition directly to the evidence in the case so as to emphasize to the jury that the appellant's defence, the onus lying upon him, could succeed if they were satisfied on the balance of probabilities that the appellant believed that the complainant was not intellectually impaired. In this regard the jury's attention would need to be drawn to the apparently normal conversations that the appellant had had with the complainant, that is to say her not substantially reduced capacity for communication, her mature appearance, her ability to interact with him, and the absence, so far as he was aware, of her need for support, and in particular his evidence in cross-examination about these matters that we have set out.
There are varying degrees of belief just as there are varying degrees of consciousness, cognition, awareness, sophistication, experience, maturity, gullibility and naivety. A person may understand some matters very well and others barely at all. In general, people are entitled to believe what they have no reason to suppose to be otherwise or what it would not occur to them to question. The presence or absence of a belief may be a matter of inference. In Jiminez v The Queen (1992) 173 CLR 572 at 575 per Mason CJ, Brennan, Deane, Dawson, Toohey and Gaudron, 585 per McHugh JJ. The majority judgment of this Court pointed out that the absence of a warning that a person was too fatigued to drive and might fall asleep, laid a foundation for an honest and reasonable belief that it was safe for an accused driver to continue driving (1992) 173 CLR 572 at 583-584. Here the appellant's evidence was that he thought the complainant to be fine. He denied that he had reason 'to believe, to understand, to apprehend, to comprehend, to realize that [the complainant] was an intellectually impaired person'. She conversed with him about her interests and invited him to her house. She was physically mature. She spoke normally except for a slight accent and lisp. On the appellant's version she invited sexual overtures. This evidence did lay a foundation for a submission and directions of the explicit kind to which we have referred, as to a belief of the appellant that the complainant was not intellectually impaired. Having regard to the failure of the appellant's counsel to seek any redirections at trial, we do not consider that it is necessary for us to decide whether an appeal would be allowed on a challenge to the trial judge's directions on this issue. However, on any retrial, depending upon how the evidence falls out, directions should be given which give effect to what we have said.
The ground concerning the trial judge's directions with respect to the defence of honest and reasonable mistake of fact that the complainant did have the cognitive capacity to consent is not sustainable. The directions with regard to that defence were adequate.
As we have foreshadowed, the appellant's submission that acquittals should be entered has not been made out. There was evidence upon which a properly directed jury could reach the verdicts that they did. However, they could only do this in a fair trial that met the high standards required by the law both of a prosecutor and of a trial judge presiding over it."
In its judgment delivered some four days earlier than that in Libke (AJS v R (2007) 171 A Crim R 436), the High Court rejected an appeal based on a claim that the Victorian Court of Appeal had erred in ordering a retrial rather than a verdict of acquittal. The court considered that the power of the Court of Appeal was not confined to the crime which was the subject of conviction, but extended to a crime for which the appellant could have been convicted at trial. The appellant had contended that the Court of Appeal was obliged to choose between directing a judgment and verdict of acquittal on the charge which was the subject of the appeal, or directing that a new trial of that charge be held. That argument was rejected on a number of bases which included the power to order a new trial for an offence for which the appellant could have been convicted at the first trial, with Gleeson CJ, Hayne, Heydon and Crennan JJ referring, in their joint reasons, to the earlier cases of Kelly v The King (1923) 32 CLR 509; Callaghan v R (1952) 87 CLR 115 and R v Miller [1951] VLR 346. Here the indictment alleged the crime of dishonestly acquiring a financial advantage. The particulars represented the manner of acquisition, but both the evidence and the basis on which the case was presented was the use of a process which resulted in the generation of a false or deceptive invoice to be provided to, and paid by, the company. It is open for the case to be remitted for trial, rather than this Court substituting a verdict of acquittal.
In Fermanis (supra), the court substituted verdicts of acquittal but did so on an evaluation of the evidence as a whole. Here the evidence concerning the provision of parts and the cost of installation was capable of supporting verdicts of conviction (Weiss (supra)).
Here I would order a retrial rather than propose the substitution of the entry of a verdict of acquittal.
That said, it is appropriate that these counts be remitted for trial.
I would quash the convictions and order that the first appellant be remanded for trial with respect to counts 3, 4 and 6 and the second appellant in respect of counts 3 and 4.
File No CCA 9/2007
PETER JOHN LOONE and MALCOLM JAMES LOONE
v THE STATE OF TASMANIA
REASONS FOR JUDGMENT COURT OF CRIMINAL APPEAL
EVANS J
25 February 2008
Counsel for the State concedes that errors in the learned trial judge's directions to the jury warrant allowing this appeal and the State does not seek to rely on the proviso. In these circumstances the contest between the parties is as to whether the outcome of the appeal should be the acquittal of the defendants or whether they should be retried.
The matters that form the basis for the concessions made by counsel for the State are canvassed in the judgments delivered by the Chief Justice and Slicer J. I will not re-visit them.
The sole ground of appeal relied upon by each appellant is that the convictions were unsafe and unsatisfactory. As I understand it, this course was pursued on behalf of each appellant in the belief that success on this ground would inevitably result in an acquittal. Such is not the case. See, for example, Gipp v R (1998) 194 CLR 106 where Gaudron, Kirby and Callinan JJ each allowed the appeal on the ground that the verdicts were unsafe and unsatisfactory, quashed the verdicts and directed a retrial. At par146, Kirby J said:
"The appellant asked that, if his appeal were allowed, the convictions should be quashed and verdicts of acquittal entered. That is ordinarily appropriate where the verdict entered at the trial is unreasonable or cannot be supported having regard to the evidence. But where, as here, the real objection which ultimately succeeds concerns errors of judicial misdirection and non-direction resulting in a miscarriage of justice, the proper course is to quash the convictions and to order a new trial. It will then be for the prosecuting authorities to decide whether, in the circumstances, a retrial should be had."
As to the outcome of a successful appeal, the Criminal Code Act 1924 ("the Code") affords no special status to a ground that the verdict was unsafe and unsatisfactory, indeed the Code does not expressly recognise this ground. It relevantly provides:
"402 (1) On an appeal the Court shall allow the appeal if it is of opinion that the verdict of the jury should be set aside on the ground that it is unreasonable, or cannot be supported having regard to the evidence, or that the judgment or order of the court of trial should be set aside on the ground of the wrong decision of any question of law, or that on any ground whatsoever there was a miscarriage of justice, and in any other case shall dismiss the appeal.
…
(3) Subject to the special provisions of this chapter, the Court shall, if it allows an appeal against conviction, quash the conviction and direct a judgment and verdict of acquittal to be entered."
"404 (1) On any appeal the Court may, either of its own motion or on the application of the appellant, order a venire de novo or new trial at such time and place as it thinks fit, if the Court considers that a miscarriage of justice has occurred, and that, having regard to all the circumstances, such miscarriage of justice can be more adequately remedied by an order for a venire de novo or new trial than by any other order which the Court is empowered to make."
Although the Code makes no express reference to a ground of appeal that asserts that a verdict is unsafe or unsatisfactory, it is well recognised that a ground expressed in those terms may come within one or more of the grounds specified in s402(1); see for example M v R (1994) 181 CLR 487, Mason CJ, Deane, Dawson and Toohey JJ at 492. The specified grounds are that the verdict should be set aside because:
(i) it is unreasonable;
(ii) it cannot be supported having regard to the evidence;
(iii) of a wrong direction on any question of law; or
(iv) on any other ground whatsoever there was a miscarriage of justice.
Whilst a ground of appeal that asserts that a verdict is unsafe or unsatisfactory is recognised, courts discourage reliance on the ground as the phrase "unsafe and unsatisfactory" has no very precise meaning (Gipp v R (supra), Gaudron J, par17) and its use is likely to mislead (Gipp v R (supra), Kirby J, par125). In Fleming v R (1998) CLR 250, Gleeson CJ, McHugh, Gummow, Kirby and Callinan JJ said at par12:
"The fundamental point is that close attention must be paid to the language of s6(1) of the Criminal Appeal Act. [This New South Wales provision is in similar terms to the Code, s402(1).] Use of the potentially confusing phrase 'unsafe and unsatisfactory' to cover the several different elements in the sub-section is liable to mislead. There is no substitute for giving attention to the precise terms in which s6(1) is expressed."
In Giam v R (1999) 104 A Crim R 416, Spigelman CJ, agreed with by Abadee and Adams JJ, said at par31 that a ground of appeal that a verdict is "unsafe and unsatisfactory" is no longer appropriate, and, at par44, that it would be preferable in future to identify such a ground as a "miscarriage of justice" or use other terminology in accordance with the equivalent of the Code, s402(1), together with an appropriate degree of particularity. I endorse that view. On this appeal, each appellant's failure to provide appropriate particulars of the matters that underpin his ground of appeal has confused and probably delayed the disposal of each appeal.
As can be seen from the Code, ss402(3) and 404(1), the statutory provisions that govern the disposal of a successful appeal do not make the manner in which it is to be disposed of dependent upon the ground upon which it is sustained.
In King v R (1986) 161 CLR 423 at 433, Dawson J, agreed with by Gibbs CJ, said of the New South Wales equivalent to the Code, s404(1):
"The section itself lays down the conditions for its own application. The miscarriage of justice to which it refers must be such that it can be more adequately remedied by an order for a new trial than by any other order which the court is empowered to make. But the section nevertheless confers a broad discretion. Matters relevant to the exercise of that discretion have been discussed in the cases: Peacock v The King (1911) 13 CLR 619, at pp 641, 675; Andrews v The Queen (1968) 126 CLR 198, at p 211; Gerakiteys v The Queen (1984) 153 CLR 317, at p 321; Director of Public Prosecutions (Nauru) v Fowler (1984) 154 CLR 627, at pp 630-631; Reid v The Queen (1980) AC 343, at pp 348-349."
A detailed list of instances where the High Court, in the exercise of its discretion, has refused to order a retrial is contained in Dyers v R (2002) 210 CLR 285, Kirby J, pars82 and 83.
In Cheatley v R [1981] Tas SR 123 at 137 – 138, Everett J said with reference to the Code, ss402(3) and 404(1):
"My conclusion is that there is no presumption in favour of a second trial being ordered when an appeal succeeds, and that the discretion of the court must be exercised on a consideration of all the relevant facts and circumstances. The accused should be accorded neither more nor less personal consideration than the overall justice of the case requires in recognition of the public interest in the fair and impartial administration of criminal justice. I do not accept the counter argument on behalf of the prosecution that 'the ordinary course should apply'. I do not consider, for reasons I have expressed, that there should be any 'ordinary' course. Each case is individual and should be determined on the basis of the facts and all relevant considerations which apply to it – not to a different case. It is a negation of the wide discretion vested by statute in the Tasmanian Court of Criminal Appeal to suppose that a common mould exists and that all cases should be judged within its framework."
In King v R (supra) at 426, Murphy J said of the above passage that it clearly spelt out the correct approach. I approach the contest between the parties with that passage in mind and consistent with the decision of the High Court in Director of Public Prosecutions (Nauru) v Fowler (supra) at 627 where the court said at 630:
"The power to grant a new trial is a discretionary one and in deciding whether to exercise it the court which has quashed the conviction must decide whether the interests of justice require a new trial to be had. In so deciding, the court should first consider whether the admissible evidence given at the original trial was sufficiently cogent to justify a conviction, for if it was not it would be wrong by making an order for a new trial to give the prosecution an opportunity to supplement a defective case. In the present case, the admissible evidence given at the trial satisfies this test. Then the court must take into account any circumstances that might render it unjust to the accused to make him stand trial again, remembering however that the public interest in the proper administration of justice must be considered as well as the interests of the individual accused."
I am satisfied that the admissible evidence given on the trial of each appellant was sufficient to provide a pathway to convicting each appellant in respect of the counts on which his appeal has succeeded. Save insofar as it may be said that the inconvenience and hardship associated with a retrial amounts to an injustice, I am not satisfied that any particular circumstance renders it unjust to order the retrial of either appellant on the counts in respect of which the appeals have succeeded.
I would quash the convictions of each appellant and order that the first appellant be retried with respect to counts 3, 4 and 6, and that the second appellant be retried in respect of counts 3 and 4.
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